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INTERSTATE  COMMERCE  COMMISSION  REPORTS 
VOLUME  65 

DECISIONS  OF  THE 

3'  INTERSTATE  COMMERCE  COMMISSION 

OF  THE  insriTEB  STATES 

(FINANCE  KEPOKTS) 

lUT,  im  TO  jiNDuiT,  un 

REPORTED  BV  THE  COMMISSION 


c.s.,=j  I,  Google 


IliTERSIATE  COMMERCE  COMMISSION. 


EDGAR  E.  CLARK,  Ohainum. 

CHARLES  C.  McCHORD.  ROBERT  W.  WOOLLET. 

BALTHASAK  H.  METER.  JOSEPH  B.  EASTMAN. 

HENRY  C.  wtT.T,  HENRY  J.  FORD. 

WINTHROP  M.  DANIELS.  MAKE  W.  POTTER. 

CLYDE  B.  AITCHISON.  ' 


Geobob  B.  MoGintt,  Secretary. 
Commissioner  Woolut'b  t«mi  expired  December  31,  1920. 


Di.itradb,  Google 


^^J^.-1.^i*-/f. 


CONTENTS. 


Members  of  the  Commission ii 

Table  of  decisions v 

Table  of  cases  cited xvn 

Opinions  of  the  Commission 1 

Index  digest 818 

66 1,  c,  C.  m 


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ADDITIONAL  COFISB 


fl.TS  FEB  copy  (BudBAK) 


D,=;,lz...,C00gIC 


TABLE  OP  DECISIONS. 


AUbuna  &  Vicksburg  By.  Ca,  Loan  to  Aid  in  Meeting  Ma- 
turing Indebtedness  and  in  Providing  Additional  Locomo- 
tives       650 

Ann  Arbor  B.R.  Co.: 

Loan  to  Aid  in — 

Acquiring  LocomotiveB 90, 660 

Meeting  Maturing  Indebtedness 525 

Providing  Additions  and  Betterments 693 

Note  Issue  in  Procurement  of  Locomotives 191 

Announcement  of  Principles  to  be  Observed  in  Kecommending 

Loans  from  the  Revolving  Fund 12 

Aransas  Harbor  Terminal  By.,  Loan  for  Beconstniction  of 

-Damaged  Main  Line 20 

A^iland  Coal  &  Iron  By.  Co.,  Short-Term  Not^  Issue  in  Re- 
fund of  Maturing  Notes 94 

Atchison,  Topeka  &  Santa  Fe  Rj.  Co. : 

Certificate  of  Public  Convenience  and  Necessity  to  Aban- 
don a  Branch  Line 386 

First  and  Refunding  Mortgage  Bonds  Issue 329 

Loan  to  Aid  in  Providing  Equipment 59 

Stock  Isane  in  Exdiange  for  Convertible  Bonds 76 

Atlanta  &  St.  Andrews  Bay  Ry.  Co.,  Final  Settlement 626 

Atlanta,  Birmingham  &  Atlantic  By.  Co.,  Loan  to  Aid  in  Meet- 
ing Maturing  Indebtedness  and  Providing  Equipment 67 

Atlantic  Coast  Line  R.  R.  Co.,  Authority  to  Execute  an  Equip- 
ment-Trust Agreement  and  Lease  of  Equipment,  and  There- 
by to  Assume  Obligation  or  Liability  for  Trust  Certificates.       571 
Baltimore  &  Ohio  &  Chicago  R.  R.  Co.,  Authority  to  Issue  and 

Deliver  B<mds  to  Baltimore  &  Ohio  R.  R.  Co 588, 720 

Baltimore  &  Ohio  B.  R  Co. : 

Conditional-Sale  Purchase  Notes  Issue,  to  Guarantee 
Obligation  of  National  Ry.  Service  Corp.,  and  Refund- 
ing and  General  Mortgage  Bonds  Pledge 599 

Exchange  of  Befunding  and  General  Mortgage  Bonds 

and  to  Pledge  Bonds - 704 

Ijoan  to  Provide  Additions  and  Betterments 234,575 

Refunding  and  General  Mortgage  Bonds  Issue ;  and  In- 
tervening Petitions  of  Subsidiaries  for  Authority  to 
Issue  and  Deliver  Bonds 688,720 


,C"itHl«^lc 


VI  TABLE  OF  DECISIONS. 

Baltimore  Ss  Ohio  K.  R.  Co.  in  Pennsylvania,  Authority  to 

Issue  and  Ddiver  Bonds  to  Baltimore  &  Ohio  R.  R.  Co—  588,  720 
Baltimore  &  Ohio  Southwestern  B.  B.  Co.,  Authority  to  Issue 

and  Deliver  Bonds  to  Baltimore  &  Ohio  R.  R.  Co _  588,720 

Baltimore  &  Philadelphia  R.  R.  Co.,  Authority  to  Issue  and 

Deliver  Bonds  to  Baltimore  &  Ohio  R.  R.  Co ._  688, 730 

Bangor  &  Aroostot^E  R.  R  Co. : 

Authority  to  Execute  Equipment-Trust  Agreement;  to 
Lease    Equipment    Thereunder ;    to    Sail    Prior-Lien 
Equipment-Trust  Certificates ;  and  to  Fledge  Securities-      S28 
Loan  to  Aid  in  Providing  Equipment  and  other  Additions 

and  Betterments ___  44,661,734 

Boston  &  Maine  R.  R. : 

Loan  to  Meet  Maturing  Indebtedness 1 

Loan  to  Aid  in  Providing  New  Equipment  and  Other 

Additions  and  Betterments 402 

Mortgage  Bond  Issue  foT-~ 

Refunding  Bonds  and  Notes 218 

Retiring  and  Refunding  Maturing  Bonds 68S 

Buffalo,  Rochester  &  Pittsburgh  Ry.  Co.,  Loan  to  Aid  in  Meet- 
ing Maturing  Indebtedness 630 

California,  Arizona  &  Santa  Fe  Ry.  Co.,  Certificate  of  Public 

Convenience  and  Necessity  to  Abandon  a  Branch  Line 386 

Carolina,  Clinchfield  &  Ohio  Ry. : 

Cumulative  Income  Deb^tures  Issue 603 

Loan  to  Meet  Maturing  Obligiiti<ms  and  to   Provide 

Equipment  and  Other  Additions  and  Bett«inentB 26, 251 

Central  New  England  Ry.  Co.,  I^oan  to  Provide  Additions 

and  Betterments 294 

Central  of  Georgia  Ry.  Co. : 

Authority  to  Procure  Authentication  and  Delivery  of  Re- 
funding   and    General   Mortgage    Bonds    and    Make 

Pledges  of  Same 697 

Execution  of  Equipment-Trust  Agreement  and  Lease, 
and  Assumption  of  Obligation  as  GKiarantor  of  Trust 

Certificates 773 

Guarantee  of  Bonds  of  Ocean  Steamship  Co.  of  Sa- 
vannah  . 1 65 

Loan  to  Aid  in  Providing  New  Equipment 72,619,788 

Central  Vermont  Ry.  Co.,  Refunding-Mortgage  Bond  Issue.  126,473 
Central  Wisconsin  Ry.  Co.,  Certificate  of  PnUic  Convenienoe 
and  Necessity  to  Acquire  and  Operate  a  Line  of  Railroad-.      747 


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•staiM  or  DBoisiORa.  vn 

Chesapeake  &  Ohio  By-  Co,  ■  tub. 

Authority  to — 

Execute  Equipment-Trust   and  Lease  Agreements, 

anS  to  Guarantee  Certificates 469 

Procure  Authentication  and  Delivery  of  First  Lien 
and  ImproTement  Mortgage  Bonds  and  to  Pledge 

Said  Bonds  as  Part  Security  for  a  Loan 618 

Conunon  Capital  Stock  Issue  in  Conversion  of  Converti- 
ble Bonds 748 

Loan  to  Aid  in  Providing  Equipment  and  Other  Addi- 
tions and  Betterments 261 

Note  Guarantee  of  the  Louisville  &  Jeffersonville  Bridge 

&  E.  R.  Co . - 767 

Chicago  &  North  Western  Ey.  Co.,  Guarantee  of  Note  of  In-     ^ 

diana  Harbor  Belt  E.  R.  Co _ _      793 

Chicago  &  Western  Indiana  E.  R.  Co. : 

Authority  to  Issue  Collateral-Trust  Bonds  and  ^otes,  and 
to  Pledge  Mortgage  Bonds  as  Security  Therefor  and  for 

a  Loan  from  the  United  States - 230 

Loan  to  Aid  in  Meeting  Maturing  Indebtedness  and  in 

Making  Additions  and  Betterments 113,155 

Chicago,  Burlington  &  Quincy  E.  E.  Co.,  Iioan  to  Provide  in 

Part  for  Purchase  of  New  Equipment 48 

Chicago  Great  Western  R.  R.  Co.,  Loan  to  Aid  in  Providing 

New  Equipment  and  Other  Additions  and  Betterments 100, 

157,241,433,486,529 
Chicago,  Indianapolis  &  Louisville  Ey,  Co.  i 

Authority  to  Issue  and  Assunie  Payment  of  Notes 326 

Loan  to  Aid  in  Providing  Equipment  and  Otho-  Additions 

and  Betterments 298,606 

Chicago,  Milwaukee  &  St.  Paul  Ey.  Co. : 

Guarantee  of  Note  of  tJie  Indiana  Harbor  Belt  E.  E.  Co—      796 

Loan  to  Meet  Maturing  Indebtedness , 491 

Chicago,  Eock  Island  &  Pacific  Ry.  Co. : 

General  Mortgage  and  First  and  Befunding  Mortgage 

Bonds  Issue 238,430 

Loan  to  Aid  in  Providing  Equipment  and  Other  Additions 
and  Betterments  and  in  Meeting  Maturing  Indebted- 
ness,  ^ - - 224,  371,  431 

Chicago,  St.  Paul,  Minneapolis  &  Omaha  Ey.  Co.,  Assumption 
of  Payment,  and  Sale  or  Pledge  of  Equipment-Trust  Cer- 
tificates  — - 308 


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Vtn  TABLE  OF   DBCiaiONa. 

Oincinnati,  Xew  Orleans  ft  Texas  Pacific  R7.  Co.,  Authority  to 
Assume,  as  Lessee  of  the  Cmcinnati  Southern  Ry.,  Obli- 
gations in  Sespect  to  Bond  Issues  of  the  City  of  Cincin- 
nati  -,.__      681 

Cincinnati  Northern  R.  R.  Co.: 

Loan  to  Aid  in  Acquiring  Equipment  and  Additions  and 

Betterments 603 

Promissory  Note  Issue 668 

Cincinnati  Southern  Ry.,  Authority  of  Cincinnati,  New  Or- 
leans &  Texas  Pacific  Ry.  Ca,  as  Lessee  of,  to  Assume 
Obligations  in  Respect  of  Bonds  Issue  of  the  City  of  Cin- 
cinnati       581 

Cleveland,  Cincinnati,  Chicago  &  St.  Louis  Ry.  Co. : 

■Authority  to  Issue  Promissory  Notes,  to  Issue  and  Pledge 
Refunding  and  Improvement  Mortgage  Bonds,  and  to 

Guarantee  a  Note 549 

Loan  to  Aid  in  Acquiring  Equipment  and  Additions  and 

Betterments 503 

Note  Guarantee  of  the  Louisville  &  Jefferson ville  Bridge  & 

R.  R.  Co 764 

Coon  Bayou  &  Arkansas  City  Ry.  Co.,  Certificate  of  Public 
Convenience  and  Necessity  to  Construct  and  Operate  a 

New  Line 701 

Delaware  &  Hudson  Co.: 

Authority  to  Issue  First  and  Refunding  Mortgage  Bonds 

and  to  Pledge  a  Part  Thereof 347 

Loan  to  Provide  New  Equipment  and  Additions  and 

Betterments 96, 332, 850 

Eastern  Texas  R.  R.  Co.,  Certificate  of  Convenience  and  Neces- 
sity to  Abandon  Its  Line  between  'La&.in  and  Eennard, 

Tex 436 

Electric  Short  Line  Ry.  Co.,  Loan  to  Provide  Additional 
Equipment  and  Make  Additions  and  Betterments  to  Ex- 
isting Equipment  and  Way  and  Structures 342 

•  Elgin,  Joliet  &  Eastern  Ry.  Co.,  Equipment  Trust  Bond  Issue..      418 
ErieR.  R.  Co.: 

Extension  Contracts  with  Holders  of  Bonds 181 

Loan  to  Aid  in  Meeting  Maturing  Indebtedness  and  in 
Providing  Equipment  and  Other  Additions  and  Better- 
ments       134 

Loan  to  Provide  Equipment  and  Other  Additions  and  to 

Meet  Maturities 317 

Fairmont,  Morgantown  A  Pittsburgh  R.  R.  Co.,  Authority  to 
Issue  and  Deliver  Bonds  to  Baltimore  &.  Ohio  R.  R.  Co.—  588, 720 


.C^oot^lc 


TaUA  Of'  DBoKtoMS.  tX 

Fedenl  Valley  H.  R.  Co.,  PromisBory  Notes  Issoe  for  Pro- 

curemeot  of  Equipment 623 

Fort  Smith  &  Western  R.  R.  Co.: 

Aatbority  to  Issue  Receiver's  Certificate  and  Pledge  as 

ColUteral  Security  for  a  Loan __      456 

Loan  to  Provide  Equipment  and  Other  Additions  and 

Betterments 459 

Foorche  River  Vall^  &  Indian  Territory  By.  Co.,  Final  Set- 
tlement  708 

Great  Northern  Ry.  Co.,  Loan  to  Meet  Mataring  Indebtedness 
and  to  Provide  Equipment  and  Other  Additions  and  Bet- 
terments  78, 139,  268 

Gulf,  Mobile  &  Northent  R.  R.  Ca ; 

Authori^  to  Issue  First  Mortgage  Gold  Bonib,  to  Pledge 

Part  as  Security,  and  to  Hold  Part  in  Its  Treasury 890 

Certificate  of  Public  Convenience  and  Necessity  to  Aban- 
don Its  ElUsville  Branch 426 

Loan  to  Aid  in  Providing  Equipment  and  Other  Addi- 
tions and  Brtterments 358 

Gulf  Ports  Terminal  Ry.  Co.,  Loan  to  Pay  Expenditures  in 
Completion  of  a  New  Line,  Replacements  and  Repairs  to 
Constructed  Lines,  and  to  Purchase  Equipmmt  and  Other 

Betterments 421 

Hocking  Valley  Ry.  Co.,  Loan  ttf  Aid  in  Providing  Additions 

and  ]Brttermenl8 812 

Huntingdon  &  Broad  Top  Mountain  R  R.  A  Coal  Co.,  Loan 

to  Aid  in  Making  Additions  and  Betterments 499 

lUinois  Central  R.  R.  Co.: 

Authori^  to  Execute  an  Equipment  Trust 813 

Loan  to  Provide  in  Part  for  Purchase  of  New  Equip- 
ment     51,200 

Inability  of  Carriers  to  Secure  Necessary  Funds  from  Other 
Sources — Loans  under  Section  210  of  the  Transportation 

Act,  1920,  as  Amended 407 

Indiana  Harbor  Belt  R.  R.  Co.: 

Demand  Promissory  Notes  Issue 362 

General  Mortgage  Bonds  Issue  and  Pledge 784 

Guarantee  of  Note  by — 

Chicago  &  North  Western  Ry.  Co 793 

Chicago,  Milwaukee  &.  St  Paul  Ry,  Co 795 

Michigan  Central  R.  R.  Co __      790 

New  York  Cential  R.  R.  Co 787 


D,=;,lz...,C00gIC 


X  TABLE  OF  DECISIOKS. 

Puce. 

Jacksonville  TemuBal  Co.,  Authority  to  Issue  Promissory 
Notes  in  B«tiewal  of  OutstaDding  Notes,  and  to  Execute  an 

Additional  Promissory  Note 415 

Kanawha  &  Michigan  By.  Co. : 

Loan  to  Aid  in  Acquiring  Equipment  and  Additions  and 

Betterments 503 

Promissory  Note  Issue 562 

Kansas  City,  Mexico  &  Orient  R.  B.  Co. : 

Loan  to  Betire  Receiver's  Certificates  and  Meet  Fix«d 

Cbat^es  and  Operating  Expenses 36,265 

Authority  to  Issue  Receiver's  Certificate  as  Collateral 

Security  283 

Beceiver's  Certificates  Issue  to  Pay  for  Coal  and  Other 

Supplies  Keceflsary  for  Continued  Operation 193 

Kansas  City,  Mexico  &  Orient  By.  Co.  of  Texas,  Loan  to  Be- 
tire Bec^ver's  Certificates  and  Meet  Fixed  Charges  and 

Operating  Expenses  during  Tansition  Period 36,265 

Kansas,  Oklahoma  &  Gulf  By,  Co.,  Bonds,  Preferred  Stock, 

Common  Stock,  and  Equipment  Trust  Notes  Issue 672 

Lake  Erie  &  Western  B.  B.  Co. : 

Loan  to  Aid  in  Acquiring  Equipment  and  Additions  and 

Betterments  __ 603 

Promissory  Note  Issue 665 

Lease  of  Valley  Terminal  By.  Property 105 

Lehigh  &  Hudson  River  By.  Co.,  Authority  to  Issue  and  Sell 

Capital  Stock,  the  Proceeds  to  be  Used  to  Retire  Bonds 620 

Little  Cottonwood  Transportation  Co.,  Final  Settlement 189 

Loans  from  Revolving  Fund,  Announcement  of  Principles  to 

be  Observed  in  Recommeodiog 12 

Loans  Under  Section  210  of  the  Transportation  Act,  1920,  as 
Amended — Inability  of  Carriers  to  Secure  Necessary  Funds 

from  Other  Sources 407 

Long  Island  B.  R.  Co. : 

Authority  to  Execute  an  Equipment  Trust  and  Issue  Un- 
secured Notes 144 

Loan  to  Aid  in  Providing  Equipment  and  Other  Addi- 
tions and  Bettennents 247,467 

Louisiana  &  Arkansas  By.  Co.,  Equipment  Trust  Note  Issue 122 

Louisville  &  Jeffersonville  Bridge  A  R.  B.  Co. ; 

First-Mortgage  Bonds  IsBoe 761 

Guarantee  of  Note  by  the  Chesapeake  &  Ohio  By.  Co 767 

Guarantee  of  Note  by  the  Cleveland,  Cincinnati,  Chicago 
&  St.  Louis  By.  Co 764 


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TABUl  OV  DECISIONS.  ZI 

Maine  Central  R.  B.  Co. :  rim. 

First  and  Refunding  Mortgage  Bonds  lasue  and  Pledge—      304 

Loan  to  Meet  Maturing  Indebtedness 240,244 

Loan  to  Provide  Equipment  and  Other  Additions  and  Bet- 

tennents 203 

Marion  &  Rye  Valley  Ry.  Co.,  Assumption  of  Obligation  to 
Guarantee  Payment  of  Note  of  tbe  Virginia  Southern  R.  R. 

Co 778 

Maxton,  Alma  &  Southbound  R.  R.  Co.,  Loan  for  Purchase  of 

Leased  Rail  and  to  Meet  Short-Term  Notes 302 

Michigan  Central  R.  R.  Co. : 

Authority  to  Issue  Promissory  Kot«s,  and  to  Issue  and 

Pledge  Refunding  and  Improvement  Mortgage  Bonds—  544 
Guarantee  of  Hote  of  the  Indiana  Harbor  Belt  R.  R.  Co.-  790 
Loan  to  Aid  in  Acquiring  Equipment  and  Additions  and 

Betterments 608 

Michigan  Northern  R.  R.  Co.,  Authority  to  Cwistmct  a  Line  in 

Michigan . .   480 

Minneapolis  &  St.  Louis  R.  R.  Co.,  Promissory  Notes  Issue—  522, 658 
Missouri,  Kansas  &  Texas  Ry.  Co.  of  Texas,  Equipment  Notes 

Issue -, 840 

Missouri  Pacific  R.  R  Co.: 

Agreement  for  Extension  and  Guaranty  of  Gold  Notes 450 

Loan  to  Aid  in  Meeting  Maturing  Indebtedness  and  in 
Providing  Equipmuit  and  Other  Additions  and  Better- 
ments.  _ 272,643 

Monson  B.  B.  Co.,  Final  Settlement 78X 

Moore  Haven  &  Clewiston  Ry.  Co.,  First  Mortgage  Bonds 

Issue _ r- - 647 

New  Orleans,  Texas  &  Mexico  Ry.  Co.,  Authority  to  Issue 
Notes;  Execute  Contract  to  Purchase  Locomotives;  Issue 
Mortgage  Bonds,  Inoome  Bonds,  and  Capital  Stock  or  Vot- 
ing-Trust Certificates;  and  Pledge  Bonds  as  Security  for 

a  Loan 682 

New  York  Central  R.  R.  Co.: 

Authority  to  Issue  Bonds  and  Certificates ;  to  Indorse  and 
Guarantee    Promissory    Notes    of    Subsidiaries;    and 

Pledge  Securities  for  Loans . 534 

Collateral-Trust  Bonds  and  Refnndiog  and  Improvement 

Mortgage  Bonds  Issue 172 

Guarantee  of  Note  of  the  Indians  Harbor  Belt  R.  R.  Co— .    -  7^ 
Loan  to  Aid  in  Acquiring  Equipment  and  Additions  amd' 
Betterments 503 


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XII  TABLE   OP  DECISIONS. 

New  York  Central  B.  R.  Co.— Continued.  p»n* 

Refunding  and  Improvement  Mortgage  Bonds  Issue,  and 

Pledge  of  Bonds  as  Security :--      714 

New  York,  New  Haven  &  Hartford  R.  R.  Co. : 

Authority  to  Issue   Promissory  Notes  and  to  Issue  and 

Pledge  Equipment  Trust  Notes 289 

First  and  Refunding  Mortgage  Bonds  Issue  and  Pledge.      398 
Loan  to  Aid  in  Providing  Equipment  and  Other  Additions 

and  Betterments 876 

Norfolk  &  Portsmouth  Belt  I^ne  R.  R.  Co.,  Short-Term  Note 

Issue Ul,  129 

Norfolk  A  Western  Ry.  Co. : 

Certificate  of  Public  Convenience  and  Necessity  to  Acquire 

and  Operate  Certain  Feeder  Lines 757 

Stock  Issue  in  Exchange  for  Convertible  Bonds 63 

Norfolk  Southern  R.  R.  Co.,  Final  Settlement _      798 

Northern  Pacific  Ry.  Co. : 

Certificate  of  Public  Convenience  and  Necessity  to  Aban- 
don a  Portion  of  Line 7R0 

Loan  to  Aid  in  Providing  Equipment  and  Other  Additions 

and  Betterments 886 

Ocean  Steamship  Co.  of  Savannah,  Guarantee  of  Bonds  by  the 

Central  of  Georgia  Ry.  Co — 65 

Oregon-Washington  R.  R.  &  Navigation  Co.,  First  and  Re- 
funding Mortgage  Bonds  Issue  in  Conversion  of  Similar 

Bonds 739 

Paris  &  Mount  Pleasant  R.  R.  Co.,  Receiver's  Certificates 

Issue 158 

Pennsylvania  R.  R.  Co.,  Loan  to  Aid  in  Providing  New  Equip- 
ment and  Other  Additions  and  Betterments 822 

Pensacola,  Mobile  &  New  Orleans  Ry.  Co.,  Loan  to  Pay  Ex- 
penditures in  Completion  of  a  New  Line,  Replacements  and 
Repairs  to  Constructed  Lines,  and  to  Purchase  Equipment 

and  Other  Betterments 421 

Peoria  4  Pekin  Union  Ry.  Co. : 

Authority  to  Extend  the  Maturity  of  Mortgage  Bonds  and 

Increase  the  Rates  of  Interest ...      809 

Loan  to  Meet  Maturing  Indebtedness .._      801 

Pere  Marquette  Ry.  Co.,  Certificate  of  Public  Convenience  and 

Necessity  to  Abandon  a  Line  of  Railroad  in  Michigan 410 

Pittsburgh  £  Lake  Brie  R.  B.  Co.: 

Authority  to  £!xecate  an  Equipment  Trust 159 

Note  Issue 117 

Promissory  Note  Issue 119 


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Table  of  decisions.  xni 

Pittabnrgh  &  Western  B.  R.  Ca,  Authority  to  Issue  and  De- 
liver Bonds  to  Baltimore  &  Ohio  R,  R.  Co 588, 720 

Pittebargh  A  West  Virginia  Hy.  Co.,  Authority  to  Acquire 

Control  of  West  Side  Belt  K.  R.  Co 124 

Pittsburgh  Junction  B.  B.  Co.,  Authority  to  Issue  and  Deliver 

Bonds  to  Baltimore  A  Ohio  R.  R.  Co 588,720 

FortlsDd,  Astoria  &  Pacific  R.  B.  Co.,  Certificate  of  Public 
Convenience  and  Necessity  to  Acquire  the  Operation  of  a 

Line  of  Railroad 781 

Potato  Creek  B.  B.  Co.,  Certificate  of  Public  Convenience  and 
Necessity  for  Extension  and  Abandonment  of  a  Portion  of 

Line 636 

Principles  to  be  Observed  in  Becommending  Loans  from  the 

Revolving  Fund — 1 -        12 

Revolving  Fund: 

Axinoancement  of  Principles  to  be  Observed  in  Recom- 
mending Loans  From 12 

Applications  for  Loans  from — ^Inability  of  Carriers  to 

Secure  Necessary  Funds  from  Other  Sources 407 

BicluBond,  FredBricbBbiirg,£  Potomac  R.  R.  Co.,  Authority  to 

Indorse  and  Negotiate  Notes  of  Richmond  Terminal  Ry.  Co.      215 
Richmond  Terminal  By.  Co. : 

Authority  of  Richmond,  Fredericksburg  &  Potomac  R.  B. 

Co.,  to  Indorse  and  Negotiate  Notes  of 216 

Notes  Issue - — 768 

Butland  R.  B.  Co.,  Loan  to  Aid  in  Providing  Additions  and 

Betterments  to  Way  and  Structures 361 

St.  Joseph  Belt  Ity.  Co.,, Certificate  Under  Section  204  of 
Transportation  Act,  1920,  that  Carrier  not  Under  Private 

Operation  During  Federal  ControL—. _ 443 

SL  Louis  Southwestern  Ry.  Co.,  Lease  of  Valley  Terminal  Ry. 

Property __—_,_„ ...      106 

Salt  Lake  ft  Utah  B.  R.  Co.,  Loan  to  Aid  in  Meeting  Maturijig 
Indebtedness  and  in  Providing  Equipment  an«l  Other  Addi- 

tions  and  Betterments j. 8,6* 

Schuylkill  Biyer  East  Side  R.  B.  Co.,  Authori^  to  Issue  and 

Deliver  Bonds  to  Baltimore  A  Ohio  R.  R.  Co 588,720 

Seaboard  Air  line  By.  Go> : 

Authority  to  Issue  and  Pledge  Bonds  and  Other  Securities  .    182 
Loan  to  Aid  in  MeeUnj^  Maturing  Indebtedness  and  Pror 
Tiding^  Equipment  and  Other  Additioos  and  Better- 
ments  '. —■ . 148 

Shearwood  Ry.  Co.,  Loan  to  Aid  in  Meeting  Maturing  Indebt- 
ednesi  and  Addition!  and  Betterments 867 


Xnr'  TABLE  OF  imOiaiOKfli 

Southern  Pacific  Co. :  r««T- 

Loan  to  Aitl  in  Providing  New  Equipment! 365 

Stock  Issue  in  Exchange  for  Convertible  Bonds.^ 18 

Southern  Ry.  Co. : 

Authority  to  Issue  Development' and  .General  Mortgage 

Bonds,  and  to  Pledge  as  Security  in  Part  for  a  Loan 616 

Loan  to  Aid  in  Acquiring  Equipment.... _'. — ^ llO 

Tennessee  E.  R.  Co.,  Certificate  of  Public  Convenience  and 

Necessity  to  Construct  a  Branch  Line !__. ..-.. 654 

Terminal  R.  R.  Asso.  of  St.  Louis,  Loan  to  Aid  in  Heetihg  Ma- 
turing Indebtedness  aiid  in  Making  Additions  and  Better- 
ments  - : ''—. 148,  J96 

Texas  &  Pacific  Ry.  Co. : 

Agreement  for  Extension  and  Guaranty  of  Gold  Notes 456 

Equipment  Notes  Issue _. 1 ,. — .      344 

Toledo  &  Ohio  Central  Ry.  Co. :  ,  .  ,      ' 

Loan  to  Aid  in  Acquiring  Equipment  and  Additions  and 

Betterments- , .,.„ ^'.... ,    603 

Promissory  Note  Issue '_ L.l. _..      665 

Trans-Mississippi  Terminal  R.  R,  Co.:  , 

Agreement  for  Extension  and.Guaranty  of  ^Id  N'otes...  ,  '  450 

Loan  to  Meet  Matiiring  Indeb^dness , i.l S54 

Union  Pacific  R.  R.  Co. :  '  ' 

Certificate  of  Convenience  and  Necessity  for  Biteosion  of 

Line —J i i      882 

First  Lien  and  Refunding  Mortgage  Bonds  Issue  ip  Con-, 

1  of  Similar  Bonds..^ , ..l.'...-__l_._      73S 


Union  Terminal  Co.,  Authority  to  Enter  Into  Extension 

Agreements  with  Holders  of  Unsecured  Notes-l ' a»t> 

United  Railways  Cd,,  Certificate  of  Pufclic  C9nvenience  and 

Necessity  to  Abandon  a  Line...., '.^ ______._.,___     jTSM 

Valley  Terminal  Ry., Property, Lease  of '- .,105 

Virginia  Blue  Ridge  Ry.,  Promissoir  Note  Issue ^. 180 

Virginian  Ry  Co.,  Loan  to  Aid  in  Providing  Eqiiipment.  and  ' 

Additions  and  Betterments 1 , 208 

Virginia  Southern  R.  R.  Co. : 

Assumption  by  Marion  &  Rye  Valley  Ry,  Co.,  to  Guaran- 
tee Payment  of  Note  of .——.._.- ___' 778 

Loan  to  Aid  in  Meeting  Maturing  JncleDtedncss_L__ 463 

Note  Issue  and  Issue  and.  Pledge  of  First-Mortgage  Bonds.       769 
Wabash  Ry.  Co.,  Exchange  of  Convertible  Preferred  Stock.--      198 
Washington  County  B.R;  Cb.,  Autliorlty  to  Issue  and  Deliver 
feonds  to  Baltimore  &  Ohio  R.  R.  Co., ^- -n-r---      ^^S 


;:,iz...,C00gIc 


TABUl  OP  DEOISIONS.  XT 

Waterloo,  Cedar  Falls  &.  Korthem  Ky.  Co.,  I^an  to  Aid  in 

Meeting  Maturing  Indebtedness 610 

Western  Maryland  By.  Co. : 

Authority  to  Issue  First  and  Refunding  Mortgage  Bonds 

and  Pledge  Same  as  Security  for  Loans 688 

Equipment  Notes  Issue  and  Sale 717 

Loan  to  Aid  in  Meeting  Maturing  Indebtedness  and 
Providing  Equipment  and  Other  Additdons  and  Better- 
ments  _ _  86,  664,  668 

Note  and  Bond  Issue  of 88 

West  Side  Belt  R.  B.  Co.,  Authority  of  Pittsburg  A  West 

Virginia  By.  Co.  to  Acquire  Control  of 124 

Wheeling  &.  Lake  Erie  By.  Co.,  Loan  to  Meet  Maturing  In- 
debtedness and  for  Other  Purposes 217, 278,  281,  894 

Wheeling,  Pittsburgh  &  Baltimore  B.  B.  Co.,  Authority  to 

Issue  and  Deliver  Bonds  to  Baltimore  &  Ohio  B.  B.  Co 588, 720 

Wilmiogton,  Brunswick  &.  Southern  B.  B.  Co.,  Loan  to  Meet 
Maturing  Indebtedness  and  to  Make  Additions  and  Bet- 
terments       490 

Wisconsin  &.  Michigan  R.  B.  Co.,  Application  to  Beetore  and 

Resume  Operation  of  a  Line  in  Michigan 476 

Wisconsin  &.  Northern  R.  B.  Co.,  First-Mortgage  Bonds  Issue-      691 
KanesviUe  &  Western  By.  Co.: 

Loan  to  Aid  in  Acquiring  Equipment  and  Additions  and 

Betterments 608 

Promissory  Note  Issue 608 

fl6S«'— 28— Vol 


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TABLE  OF  CASES  CITED. 


Baer  Bros.  v.  D.  &  R.  G.  R.  R.  (233  U.  S.,  479) „ 42A 

Bnsb,  Receiver,  St  Louis,  Iron  Motmtain  &  Southern  By.  Co. 

V.  T.  &  P.  Ry.  Co.  (Equity  No.  1120  pending  in  distaict  court 

of  United  State*,  weat^n  district  of  Louinant) 408 

Carolina,  Clinchfield  &  QUo  By.  Loan: 

(65  L  C.  C,  28) 608 

(65  I.  C.  C,  261)- ,-. ^,- - ,808 

Central  Trust  Co.  of  New  York,  Trustee,  v.M.,  K.  &  T.  Ry.  Co. 

of  Texas  (Consolidated  cause  in  equi^  No.  2794/60,  pending 

in  district  court  of  United  States,  northern  district  of  Texas)      840 
Cincinnati,  New  Orleans  A  Texas  Pacific  Ry.  v.  I.  C.  C. 

(162  U.  S.,  184) 428 

Cincinnati  Northern  R.  R.  Co.    Note  (66  I.  C.  C,  668) 561 

Cleveland,  Cincinnati,  Chicago  &  St.  Louis  By.  Bonds  (66 

L  C.  C,  549) 686 

Columbia  Trust  Co.  r.  K.  C,  M.  ft  O.  R.  R.  Co.  (ConsoU- 

dated  cause  No.  289-N,  pending  in  district  court  of  Unit«d 

States,  first  division  of  Kansas) 194, 284 

Incieased  Rates,  1920  (58  L  C.  C,  250) 348,489 

Indiana  Harbor  Belt  R.  R.,  General  Mortgage  Bonds  Issue 

and  Pledge  (66  I.  C.  C,  784) _ 787,790,793,786 

Kanawha  ft  Michigan  Ry.    Note  (66  L  C.  C,  662) 686 

Lake  Erie  A  Western  R.  R.    Note  (65  I.  C.  C,  565) 686 

Louisville  ft  Jeffersonville  Bridge  ft  R.  R.  Co.  Bonds  (66  I.  C. 

C,  761)  767 

Michigan  Central  R.  R.  Bonds  (66  I.  C.  C,  644) 685 

New  York  Central  R.  R.  Co.  Bonds  (65  I.  C.  C,  634) 544 

Peoria  A  Pekin  Union  Ry.    Loan  (65  L  C.  C,  809) 801 

Principles  to  be  Observed  in  Recommending  Loans  (65  I,  C. 

C,  13)   _ Bl 

Bt  Louis,  Iron  Mountain  ft  Southern  Ry.  Co.  «.  T.  ft  P.  Ry. 

Co.  (Equity  No.  1120,  pending  in  district  court  of  United 

States,  western  district  of  Louisiana)  468 

Superior  Savings  ft  Trust  Co.  v.  Fort  Smith  ft  Western  R. 

R.  Co.  (Equity  No.  264,  pending  in  district  court  of  United 

1  district  of  Arkansas) 467,401 


Xnn  lABI^  OF  CASES  CITBIK 

pm*. 

Toledo  4  Ohio  Central  Ey.  Note  (66 1.  0.  C,  ftW) 686 

Trustees  Corp.  (Ltd.)  t>.  K.  C,  M.  A  O.  R.  R.  Co.  (Consoli- 
dated cause  No.  239-N,  pending  in  district  court  of  United 

States,  first  division  of  Kansas) 194,284 

United  States  v.~ 

Brooklyn  Terminal  (249  U.  S.,  296) 428 

Illinois  Terminal  Ky.  (168  Fed.,  646) 428 

Union  Stock  Yards  Co.  (226  U.  S.,  286) 438 

Virginia  Southern  R.  R.  Co. — 

Loan  (65  L  C.  C,  468) 779 

Notes  and  Bonds  (65  J.  C.  C.  769) 779 

Wilson  and  Norris  v.  Paris  &  Mt  Pleasant  R.  R.  Co.  (No.  2699, 
pending  in  district  court  of  Lamar  County,  Tex.,  fflxth 

judicial  district) 164 

ZaneBville  &  Western  Rj.    Note  (66  L  0.  C,  699) 686 


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INTERSTATE   COMMERCE  COMMISSION 
REPORTS. 


FmANOB  Docket  No.  929. 
IN  THE  MATTER  OF  THE  APPUOATION  OP  THE  BOSTON 
&  MAINE  EAILHOAD  FOR  A  LOAN  FROM  THE  UNITED 
STATES  TO  MEET  MATURING  INDEBTEDNESS. 


SiAmUudMay  19, 13S0.    Leaded  May  tj,  1910. 


Appliotiim  gnnted  in  put  and  losn  of  $5,000,000  approved. 

J.  B.  Hvtti$  tor  applicant. 

Rbfobt  of  the  OoHtiisaioN. 
DtnaiON  4,  GoinusaiONXBS  Meteb,  Daniels,  and  Eastman. 
Bi  DtviBiON  4: 

The  BoBtQD  &  Maine  Railroad,  a  carrier  by  railroad  subject  to  the 
interatate  commerce  act,  has  made  application  to  the  Interstate 
Commerce  Coimnission  for  a  loan  from  the  United  States  in  accord- 
ance with  section  210  of  tJu  transportation  act,  1920. 
In  its  api^eation,  the  cairiw  sets  forth: 

1.  That  the  amount  of  the  loan  desired  ia  $8,848,000. 

2.  That  the  term  for  which  the  loan  is  desired  is  five  years  from  the 
making  thereof. 

3.  That  the  purpose  of  the  loan  and  the  use  to  which  it  is  to  be 
appbed  are  as  ftdlows: 

Under  a  consolidation  and  reorganization  which  was  consunmiated 
on  December  1,  1919,  the  Jiltchburg  Railroad  Company,  the  Boston 
&  Lowell  Railroad  Corporation,  the  Connecticut  River  Railroad  Com- 
pany, the  Concord  &  Montreal  Railroad,  the  lowell  &  Andover  Rail- 
road Company,  the  Manchester  &  Lawrence  Railroad,  and  the  Kenne- 
bnnk  &  Kennebnnkport  Railroad  were  consolidated  with  the  Boston 
&  Maine  Railroad,  and  the  outstanding  bonds  of  these  companies 
became,  to  all  intents  and  purposes,  the  bonds  of  the  Boston  &  Maine 
Railroad,  and  during  the  current  year  bonds  or  notes  of  the  Concord 
&  Montreal  Railroad,  the  Fitchburg  Railroad  Company,  and  the 
Boston  &  Lowell  Raihoad  Corporation  mature  upon  the  following 
dates  and  in  the  f<^owing  amounts: 
<6344"- 


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nrrEBSTATB  ooumebob  ooumission  rbfobts. 


Maturll7. 

Btaailtr. 

lDt«r«t 

Amotuit. 

JSSt'jg' 

•'m 

CmctrAtiliimtrflBtUnmilMMt.: ^. i.'... 

tacoao 

MO,  000 

a,Ms,oao 

The  loan  is  for  the  purpose  of  pajing  th£Be  obligations  as  thej  fall 
due. 

4.  The  present  and  prospective  ability  of  the  applicant  to  repay 
the  loan  and  meet  the  requirementfl  of  ite  obligations  in  that  regard. 

5.  That  the  character  and  value  of  the  security  oSerejJ  are  bonds 
secured  by  a  general  mortgage  upon  all  of  applicant's  property  and 
franchises  subject  to  prior  mortgages  upon  portions  of  said  property 
amounting  to  S8,338,000,  this  security  being  the  same  security  upon 
which  the  bonds  already  acceptod  by  the  government  to  the  amount 
of  $27,879,000  depend. 

6.  That  the  public  convenience  and  necessity  will  be  served  by  the 
use  of  this  loan  for  the  purpose  of  refunding  maturities  in  the  amount 
of  $8,843,000,  as  detailed  above,  in  the  following  circumstances: 

To  the  extent  of  $5,500,000,  due  June  1, 1920,  the  amount  falling  due  ia  secured  by  a 
tint  mortgage  which  is  ahead  of  the  general  mortgage  on  approximately  200  miles  of 
main  line  of  its  railroad.  Aside  from  the  possible' serious  eSect  of  foreclosure  proceed- 
ings covering  200  milos  of  an  essential  part  of  the  qmtvm,  tbe  laihina  to  meet  these  obli- 
gations might  resuh  in  a  receivership.  R^tardless  of  the  aouodneee  of  the  preasnt 
financial  structure  of  the  Boston  &  Maine  or  of  its  prospective  earning  power  under 
reasonable  rates,  such  a  proceeding  would  have  the  inevitable  effect  of  postponing 
bx  several  years  the  restoration  of  the  credit  of  (he  system.  The  physical  pnqterty  of 
the  Boston  A  Maine  is  now  inadequate  to  meet  the  d^DUUids  upon  it,  but  ovmi  if 
tbe  property  were  entirely  adequate  at  the  present  time  it  Is  well  reoognlEad  that  die 
efficiency  ol  a  system  cannot  b»  maintained  withbut  putting  a  subetantial  amount 
of  new  coital  into  it  aimuaJIy.  The  indefiiiite  postponement  of  restoration  of  (Vedit 
which  would  follow  failure  to  meet  these  maturing  obligations  would  make  it  practi- 
cally impossible  to  obtain  any  new  capital  for  some  time  to  come,  and  for  this  reason 
the  respondent  would  be  unable  to  give  adequate  service  to  ibo  public. 

The  application  sets  forth  such  further  facts  and  details  as  the 
Commission  required  with  respect  to  the  physical  situation,  owner- 
ship, capitalization,  indebtedness,  contract  obligations,  operation, 
and  earning  power  of  the  applicant,  together  with  such  otber  facts 
relating  to  the  propriety  and  expedtepcy  of  granting  the  loan  applied 
for  and  the  ability  of  the  applicant  to  make  good  the  obligation  as 
the  Commission  deemed  pertinent  to  the  inquiry  and  required  to  be 
shown  in  the  application. 

65T.aC. 

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LOAlfr  TO  BOSTON  «  MAimC  R.  R.  S 

The  Commission  on  May  19,  1920,  afforded  the  applicant,  through 
its  executive,  legal,  financial,  and  statistical  representatives,  an 
informal  hearing  with  respect  to  its  application. 

The  milea^  owned  and  operated,  as  shown  in  the  following  table, 
includes  46.80  miles  of  electric  railway  and  2.74  miles  of  sidings  thereof: 

Line  owned l,76L39milet. 

Line  open  t«d: 

Pint  mmin  tnck 2, 304. 65  toilei. 

Other  nwin  tncka 609. 68  milea. 

Yud  tnck  and  sidings 1, 386. 29  miles. 

Totol  track  operated 4, 300. 62  milei. 

The  princ^sl  lines  and  termini  of  the  road  operated  are  Boston, 
Mass.,  to  Portluid,  Me.  (eastern  route) ;  Boston,  Mass.,  to  Portland, 
Me.  (western  route);  Jewett,  Me.,  to  Intervale,  N.  H.;  North  Cam- 
bridge, Mass.,  to  Northampton,  Mass.;  Worcesterj  Mass.,  to  Portland, 
Me.;  Boston,  Mass.,  to  Rotterdam  and  Troy,  M.  Y.;  South  Ash- 
bumham,  Mass.,  to  Bellows  Falls,  Vt.;  Boston,  Mass.,  to  WoodsviUe 
and  Grovetou,  N.  H.;  Sprii^eld,  Mass.,  to  Brattleboro,  Vt.;  Con- 
cord, N.  H.,  to  White  River  Junction,  Vt.;  Coocord,  N.  H.,  to  Clare- 
mont  Junction,  N.  H.;  and  White  River  Junction,  Vt.,  to  Canada 
Line  and  to  Sherbrooke,  Quebec. 

The  character  of  the  traffic  handled  by  the  Boston  &  Maine  is 
indicated  by  the  following  analysis  of  its  rul-line  transportation 
revenues  for  the  year  1919. 

Fni^tievenne 943,303,090:84         61. 3  per  cent 

Passenger  revenue 81,798,847.01         30. 8  per  cent 

Mail  revenue 506, 405. 25  . 7  per  cent. 

Express  revenue 2,870,930.01  4     percent 

Milk  revenue 1, 256. 636. 01  1. 8  per  cent 

Switching  revenue : 646, 784. 86  . 9  per  cent 

All  Other  revenue 322,12L12  .5  per  cent 

Total 70,703,814.10       100     percent 

The  character  of  its  freight  traffic  is  indicated  by  an  analysis  of 
tonnage  for  the  year  1919. 

Producta  of  agriculture 3, 413, 229  tons.  12.  9  per  cent. 

Products  of  aaimals 1, 359, 133  tmu.  5. 1  per  cent 

Products  of  mines 6, 629, 221  tone.         25     percent 

Products  of  forests 3,857,228  tons.         14. 6  per  cent 

Manufactures 5, 775, 845  tone.         21. 7  per  cent 

Miacellaneous  (carload) 3, 229, 517  tons.  12. 2  per  cent. 

Miscellaneous  (lees  than  carload) 2, 261, 720  tons.  8. 5  per  cent 

Total 26,515,893  tons.        100     percent 

For  the  years  ended  June  30,  1910  to  1916,  inclusive,  and  for  the 
years  ended  December  31,  19Hi  and  1917,  the  amounts  of  net  income 
or  deficits,  after  deducting  fixed  charges,  were  as  follows,  the  difference 

esi-cc. 


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4  nTTEBSTATE  GOKIIfEBCE  COMMISSION  BBPORTS. 

between  the  figures  for  1911,  1912,  and  1913  and  those  stated  in  the 
applicatJoQ  being  due  to  correction  authorizing  charge  to  unextin- 
guished premium  on  outstanding  fimded  debt: 

Yeu  ending  Juns  30, 1910 42, 850, 621. 70  net  income. 

Tear  ending  June  30,  1911 370,713.90  net  income. 

Year  ending  June  30, 1912 1, 313, 973. 20  net  income. 

Year  ending  June  30, 1913 145, 009. 73  net  income. 

Year  ending  June  30,  1914 1,970.903. 4J  A:fieit. 

Year  ending  June  30, 1915 tB6,S6$.  ST  deficit. 

Year  ending  June  30,  1913 4, 147, 695. 22  net  income. 

Year  ending  Dec.  81,  1918 4, 878, 928. 17  net  income. 

Year  ending  Dec.  31,  1917 S34,t76.66  deficU. 

It  should  be  noted  that  in  the  reorganization  which  waa  consum- 
mated on  December  1,  1919,  nearly  $40,000,000  of  guaranteed  stock 
of  leased  lines  was  converted  into  preferred  stock  of  the  Boston  & 
Maine,  thus  greatly  reducing  the  total  of  its  fixed  chaises. 

For  Uie  year  ended  December  31,  191S,  there  was  a  net  income 
including  estimated  standard  return  and  after  deducting  fixed 
charges,  of  $257,900.19,  and  for  the  year  ended  December  31,  1919, 
there  was  a  net  income,  including  standard  return  of  $9,382,527.01, 
with  adjustment  of  $118,121.86  on  account  of  1918  being  over- 
estimated, of  $2,657,522.62. 

The  combined  federal  and  corporate  income  accounts  for  the 
years  ended  December  31,  1918  and  1919,  and  for  the  months  of 
January  and  February,  1920,  show  the  following  resulte,  deficits  being 
indicated  by  italic: 


d^mTibis. 

D«?»i,  ms. 

'•B'- 

F.wr, 

n«_b. 

S7,B».n 

"SSI 

M,US.e4 
1,086,71(1.17 
1,U1,17B,11 

S,UT,m.7l 

SMS,  Ml.  M 

u.ors.att.it 

Iiicom*  HVtM  to  IlDUnf  Ud  Otbtf  rtMTT. 

.^fr-r."^.!".-:!".-?.'- 

e.08a.im.9i 

m»s9.« 

i,»aa,m.n 

Because  of  the  abnormal  conditions  which  prevailed  during  fed- 
eral control,  the  results  of  that  period  can  not  be  accepted  as  cri- 
teria in  the  present  inquiry.  The  general  balance  sheet  as  of  Feb- 
ruary 29,  1920,  shows: 

Investment  in  road  and  equipment 1192, 586, 869. 05 

Impravementa  on  leased  railmty  property 5, 097, 503. 56 

Total  inveatmenta 207,264,004.14 

Capital  itock 85,644,391.84 

Long-term  debt 108,748,122.84 

«ii.c.a 


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LOAV  TO  BOSTON  «  HAINB  It.  B.  6 

By  the  terms  of  the  oonsolidated  mortfiage  of  December  1,  1919, 
the  suthorized  tot&l  issue  of  bonds  under  that  indenture  at  any 
one  time  ootstanding,  includit^  bonds  at  that  time  reserved  for 
refunding  certain  usdeiiying  bonds  (under  the  proTi^ons  of  section 
5  of  article  4  of  the  indenture),  ia  limited  to  a  principal  amount 
which,  when  added  to  the  aggr^ate  principal  amount  of  all  the 
preexisting  bonds  secured  by  the  mortga^  and  then  outstanding, 
shall  not  exceed  twice  the  aggr^ate  ftex  valne  of  the  capital  stock 
of  the  railroad  at  the  time  paid  in  and  outstanding;  but  bonds  issued 
Uiereunder  and  held  by  the  corporate  trustee  for  tile  purpose  of 
being  exchanged  for  oUier  than  outstanding  bonds  secured  by  the 
indenture,  and  bonds  secured  thereby  for  the  payment  or  retirement 
of  which  cash  to  the  full  amount  due  thereon  has  been  deposited  with 
and  at  that  time  is  held  by  the  corporate  trustee,  shall  not  be  taken 
into  account  in  applying  this  limitation;  but  when  bonds  hare  been 
duly  issued  under  the  indenture  and  are  outstanding,  neither  the 
bonds  nor  the  lien  or  security  thereof  shall  be  in  anywise  affected  or 
impaired  by  any  reduction  in  the  amount  of  the  outstanding  capital 
stock.  The  bonds  of  the  Concord  &  Montreal  Rulroad  maturing 
June  1,  1920,  in  the  amount  of  $5,500^000,  as  above  set  forth  are  not 
secured  by  the  said  consolidated  mortgage  of  December  1,  1919,  but 
by  the  provisions  of  section  5  of  article  4  of  the  indenture,  bonds  to 
the  piincipal  amount  of  $8,338,000  "are  reserved  to  be  issued  from 
time  to  time  for  the  purpose  of  purchasing,  paying,  retiring,  or  refund- 
ing, at  or  after  maturity "  certain  underlying  bonds  aggregating  the 
amount  last  stated  and  including  the  15,500,000  of  bonds  of  the  Con- 
cord &  Montreal  Rulroad  referred  to.  The  sud  Concord  &  Mon- 
treal Railroad  bonds  are  secured  by  a  mortgage  which  itself  consti- 
tutes a  first  lien  on  about  200  miles  of  road.  The  security  for  these 
Concord  &  Montreal  Railroad  bonds  is  rated  as  very  high.  The 
general-mortgage  bonds  of  the  company  which  it  offers  are  not  as 
desirable,  dollar  for  dollar,  as  security  for  the  loan  as  the  Concord  & 
Montreal  first-mortgage  4  per  cent  bonds,  the  payment  of  which  con- 
stitutes the  principal  purpose  of  the  loan.  The  mortgage  of  Decem- 
ber 1,  1919,  provides  as  a  particular  covenant  of  the  railroad,  in  sec- 
tion 4  of  article  7,  that  the  railroad  will  pay  when  due  the  principal 
of  alt  outstanding  bonds  not  held  by  the  corporate  trustee  pursuant 
to  the  provisions  of  section  5  of  article  4  which  are  or  may  be  secured 
by  a  lien  prior  to  the  lien  of  the  indenture  of  December  1,  1919,  upon 
any  property  subject  thereto,  with  the  proceeds  of  bonds  issued  under 
said  indenture  or  otherwise.  If  such  outstanding  underlying  bonds 
are  paid  with  the  proceeds  of  bonds  reserved  under  sud  section  6  of 
article  4,  thw  by  the  provisions  of  said  section  the  underlying  bonds 
received  by  the  corporate  trustee  shall  be  held  by  it,  without  extin- 
esLca 


6  IKTEBSTATH  OOICUEEOB  COICUISSION  REPOBTS. 

guifiluuent  or  impunQcmt  of  ti»  obligatdon  tihereoa  or  of  Uie  lA'^rt- 
g^e  or  other  lien  aecuring  such  uuderlfing  hoods,  as  additional 
Becurity  undfir  the  indenture  and  upon  the  truata  therein  declared. 

The  bonds  issued  under  the  indenture  oi  December  1,  1919,  and 
now  outstuiding  are  ail  held  by  the  United  States  as  a  result  of 
operations  and  advances  arising  out  of  federal  control,  and  it  is  to 
the  interest  of  the  government  to  dispose  of  the  bonds  and  mortgf^e 
of  the  Concord  &  Mjontreal  Railroad  as  contemplated  in  the  general 
mortgage  of  Decenber  1,  1319;  first,  because  t^  the  additional 
security  thus  afforded  for  the  bcmda  now  held  by  the  United  States, 
and,  secondly,  because  such  disposition  will  increase  the  security 
and  solability  of  bonds  under  the  general  mortage  of  December  1, 
1919,  to  be  sold  to  the  public  and  should  go  far  toward  the  rehabili- 
tation of  the  credit  and  financial  ability  of  the  applicant  which  it  is 
the  purpose  of  the  present  loan  to  advance.  And  the  Ck>minisaion 
finds  that  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  bonds  offered  as  security  are  such  as  to 
furnish  reasonable  assurance  of  the  applicant's  ability  to  repay  the 
loan  of  15,000,000  which  is  recommended,  within  the  time  fixed 
therefor,  which  is  two  years,  and  to  laeet  ita  other  obligations  in 
connection  with  such  loan. 

Upon  a  consideration  of  the  physical,  income,  and  capitalizatiooi 
factors  affecting  the  application  and  of  all  the  pertinent  facts  and 
circumstances  relating  to  the  same,  and  especially  in  view  of  the 
lai^  loans  heretofore  made  by  the  government  to  this  and  other 
New  England  hues,  the  Commission  finds  that  the  transportation 
needs  of  the  pubhc  do  not  require  the  extension  of  aid  by  the  United 
States  to  the  full  amount  of  the  loan  sought,  but  that  a  considerable 
amount  of  the  money  necessary  to  meet  the  maturities  in  question 
should  he  raised  by  the  Boston  &  Maine  RaUroad  by  the  issue  and 
disposition  at  not  less  than  par  of  its  6  per  cent  bonds  with  term  of 
not  less  than  10  years  under  the  indenture  of  December  1,  1919, 
or  that  the  maturii^  obligations  should  be  converted  into  such 
bonds  at  par.  The  Commission  finds,  however,  that  because  of  the 
proximity  of  the  maturity  of  the  greater  part  of  the  underlying 
securities  referred  to,  the  making  of  a  loan  of  $5,000,000  for  two 
years  is  necessary  to  enable  the  applicant  properly  to  meet  the 
transportation  needs  of  the  public,  and  so  recommends. 

An  appropriate  certificate  will  be  issued. 


Certificate  No.  1  for  a  Loan  under  Section  210  of  the  TransportcUvm 
Act,  19W. 

The  Interstate  Commeroe  Commiasion  aooordiogly  certifies  to  the 
Secretary  of  the  Treasury: 

OB  I.  c.  a 


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LOfN  TO  BOSTON  *  UAINB  B.  B.  7 

1.  Its  findings  of  fact:  (a)  That  the  making  of  *  lo&n  of  $5,000,000 
to  the  Boston  &  Maine  Railroad  under  section  210  of  the  transporta- 
tion act,  1920,  is  necessary  to  enable  said  Boston  &  Maine  Rajlroad 
properly  to  meet  the  transportation  needs  of  the  public;  {h)  that 
the  prospective  earning  power  of  said  Boston  &  Maine  Railroad  and 
the  Telae  of  tbe  security  offered  by  it  are  such  as  to  furnish  reason- 
able asauraDce  of  ita  ability  to  repay  the  loan  within  the  time  fixed 
therefor,  which  ia  two  years,  and  to  meet  its  other  obligations  in 
connection  with  such  loan. 

2.  And  ita  recominendations :  (p)  That  the  loan  be  made  in  the 
amount  of  (5,000,000;  (6)  that  the  time  from  the  making  thereof 
wittun  which  the  loan  is  to  be  repaid  be  two  years,  (c)  That  the 
character  of  the  security  which  is  to  be  offered  therefor  be  the  two-year 
6  per  cent  bonds,  at  par,  of  the  Boston  &  Maine  Railroad,  issued 
under  its  trust  indenture  of  December  1, 1919;  and  (d)  that  as  a  con- 
dition of  the  loan  the  Boat<m  &  Maine  RiUbNiad  be  required  to  finance 
the  remainder,  S3,S43,000t.  <^  its  1920  maturities,  amounting  in  total 
to  $8,843,000,  by  the  issue  of  bonds  under  said  indenture  of  Decem- 
ber 1,  1919,  bearing  not  more  than  6  per  cent  interest,  with  term  of 
not  less  than  10  years,  and  to  be  sold  or  exchanged  at  not  less 
than  par. 

Done  at  Washington,  D.  C,  this  21st  day  of  May,  1920. 
MLGC. 


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INTEBSTATE  COMUEbCE  COUUISSIOir  BBPOBIS. 


PiNANOB  Docket  No.  1016. 

IN  TEIE  MATTER  OF  THE  APPLICATION  OF  THE  SALT 
LAKE  &  UTAH  RAILROAD  COMPANY  FOR  A  LOAN  FROM 
THE  UNITED  STATES  TO  AID  IN  MEETING  MATURING 
INDEBTEDNESS,  AND  IN  PROVIDINQ  EQUIPMENT  AND 
OTHER  ADDITIONS  AND  BETTERMENTS. 

S\timiUid  May  SO,  1910.    Decidtd  May  14, 1910. 


Application  granted  in  put  and  loan  of  $64,600  approved. 
W.  G.  Orem  aod  Boss  Beaaon  for  ftppUoaat. 

RbpoBT  or  THE  COHHISSlOIf. 

Division  4,  Cohmissionebs  Mbyeb,  Daniels,  and  Easthait. 
By  Division  4; 

The  Salt  Lake  &  Utah  Railroad  Company,  a  carrier  by  raih-oad 
subject  to  the  interstate  commerce  act,  has  made  application  to  th« 
Interstate  Commerce  Commission  for  a  loan  from  ibe  United  States 
in  accordance  with  section  210  of  the  transportation  act,  1920. 

In  said  application  the  carrier  sets  forth: 

1.  That  the  amomit  of  the  loan  desired  is  {300,000. 

2.  That  the  term  for  which  it  is  desired  is  fire  years  with  option 
to  the  applicant  of  paying  all  or  part  of  the  loan  prior  to  maturity. 

3.  That  the  purpose  for  which  the  loan  is  desired  is  to  purchase 
new  equipment  and  motive  power,  to  make  additions  and  better^ 
ments,  and  to  pay  part  of  the  floating  debt. 

In  support  of  its  present  and  prospective  ability  to  repay  the 
loan  and  meet  the  requirements  of  ita  obligations  in  this  regard,  the 
applicant  has  filed  statements  of  its  physical  situation,  income 
accounts,  and  capitalization,  and  states  that  the  public  convenience 
and  necessity  wiU  be  served  by  the  loan,  by  enabling  it  properly  to 
handle  the  sugar-beet  crop  and  other  local  traffic  along  its  lines, 
which  without  ihe  new  equipment  asked  for  it  will  be  unable  to 
handle;  also  that  if  the  loan  is  granted  the  applicant  will  be  able 
properly  to  handle  its  interchange  business. 

The  application  was  accompanied  by  such  facts  and  details  as 
the  Commission  required  with  respect  to  the  physical  situation, 
ownership,  capitalization,  indebtedness,  contract  obligations,  opera- 
tion, and  earning  power  of  the  applicant,  together  with  such  otiier 
facts  relating  to  the  propriety  and  expediency  of  granting  the  loan 

es  I.  o.  o. 


LOAN  TO  SALT  LAKS  A  UTAH  B.  B.  9 

applied  for  and  the  ability  of  the  applicant  to  make  good  the  obliga- 
tion as  the  Commission  deemed  pertinent  to  the  inquiry.  The 
application  Was  supplemented  by  a  brief  on  behalf  of  the  company 
fQed  by  its  traffic  manager,  and  by  his  affidavit  respecting  certain 
inquiries  as  to  which  the  Cominission  directed  further  investigation. 
It  appears  that  the  Salt  Lake  &  Utab  Railroad  Company  when 
first  put  in  operation  in  1914  did  largely  a  jtassengor  business,  but 
that  its  freight  business  has  been  and  is  of  growing  importance. 
Its  traffic  manager  states'  that  the  road  was  constructed  for  a 
freight  line,  and  that  while  the  freight  business  and  passenger  busi- 
ness are  now  of  about  equal  importance,  the  freight  business  will 
eventually  be  the  greater, 

The  company  operates  76.75  miles  of  line,  of  which  75.14  miles 
are  owned  and  0.61  mile  leased.  Th6  total  mileage  of  track  operated 
is  92.94  miles. 

The  main  line  of  the  company  extends  froni  Salt  Lake  City,  Utah,' 
to  Payson,  Utah,  and  there  is  a  branch  line  commencing  5.8  miles 
south  of  Salt  Lake  City  and  extending  to  Magna,  Utah. 

A  comparison  of  tiie  road's  mileage  and  cost  of  road  and  equip- 
ment accounts,  with  its  capitalization,  shows  that  its  book  invest- 
ment is  nearly  $100,000  per  mile  of  line  owned.  This  seems  some- 
what high,  but  is  explained  as  due  to  the  ownership  of  valuable 
terminal  properties  in  Salt  Lake  City.  It  appears,  however,  from 
investigation  made  in  this  Tttepect,  that  the  principal  part  of  the 
terminal  property  in  Salt  Lake  Gty  is  owned  by  the  Salt  Lake 
Terminal  Company,  the  stock  of  which  is  owned  jointly  by  the 
applicant  and  the  Bamberger  Electric  Railway  Company. 

The  application  shows  that  the  Intemrban  Construction  Company 
owns  90  per  cent  of  the  cottunon  stock  and  all  of  the  preferred  stock 
of  tbe  Salt  Lake  &  Utah  Railroad  Company.  It  does  not  appear  at 
what  rate  the  construction  company  took  the  stock.  The  traffic 
manager  explains  that  the  construction  company  was  formed  and 
built  the  road  in  order  to  properly  capitalize  and  take  care  of  interest 
during  construction. 

The  company's  balance  sheet  as  of  March  31,  1920,  submitted  with 
its  applicaUon,  shows: 

Capit&[  stock,  conunoB $3,000,000 

CapiUl  gtock,  preferred  ouUtanding 2,025,400 

TbtaJWock 5,025,400 

Bond*  ooUrtanding. 1,360,100 

Hotee  outrtanding ...■ 472,400 

Total  bond*  iDdnotM 1,822,600 

The  bonds  outstanding  represent  a  total  book  liability,  -  as  per 
balance  sheet,  of  $9,980,000,  of  which  the  amotmt  of  18,629,900  is 

60 1,  a  a 


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10  UTTBBSTATa  OOUMBBCE   OOMUISSIOIT  BEPORIS. 

shown  as  held  by  the  carrier,  leaving  the  amount  of  (1,350,100  outr- 
standiug  as  indicated.  This  entry  on  the  balance  sheet  seems  to 
be  in  «Tor  and  is  explained  as  representing  an  effort  to  enter  on 
the  balance  sheet  the  total  amount  of  bonds  authorized  under  the 
trust  indenture  by  which  the  bonds  are  secured.  This  trust  indenture 
of  April  1,  1914,  with  the  Continental  &  Commercial  Trust  &  Savings 
Bank,  as  trustee,  shows  that  the  a^r^ate  principal  amount  of  all 
the  bonds  which  may  be  issued  and  outstaudlng  under  the  indenture 
shall  not  exceed  $10,000,000.  The  difference  of  $20,000  between 
the  book  liability  shown  on  the  balance  sheet  and  the  amount  author- 
ized in  the  trust  indenture  b  explained  as  sinking-fund  retirements. 
These  sinking-fund  retirements  are  provided  for  by  section  2  of 
article  III  of  the  trust  indenture. 

The  amount  entered  as  receiver's  certificates  on  the  copy  of  balance 
sheet  filed  with  the  application,  $472,400,  represents  in  fact  notes  of 
the  company  secured  by  an  indenture  of  August  1,  191S,  entered  into 
with  the  Northern  Trust  Company,  aa  trustee. 

In  view  of  the  relatively  large  proportion  of  the  capital  stock  as 
compared  with  the  total  capitalization,  it  appears  that  regardless  of 
the  apparently  high  figures  for  road  and  equipment  per  mile,  and 
regardless  of  the  ownership  of  90  per  cent  of  the  common  stock  and  * 
all  of  the  preferred  stock  by  the  construction  company,  the  security 
of  the  bonds  offered  as  collateral  for  the  present  loan  is  good.  The 
bonds  are  not  listed  on  any  exchange,  hut,  aa  will  be  noted  by  schedule 
F  of  the  verified  application,  are  quoted  by  bankers  to  the  pubUc  at 
$95  per  $100  of  par  value.  The  salability  of  these  bonds  under  normal 
conditions  can  not  be  determined  upon  the  basis  of  available  informa* 
tion,  but  the  applicant's  representative  states  that  up  to  1916  they  sold 
at  par  or  above.  Under  present  financial  conditions  there  is  no  sale 
for  the  bonds,  hut  there  seems  to  be  no  reason  why  the  bonds  should 
not  be  high  in  both  security  and  salability  when  normal  conditions 
«re  restored.  The  income  accounts  submitted  by  the  applicant  in- 
dicate an  ability  to  pay,  with  considerable  margin,  the  interest  on  the 
obligation  proposed. 

The  Conunission  therefore  £nds  that  the  prospective  earning  power 
of  the  applicant  and  the  character  and  value  of  the  security  offered 
are  such  as  to  afford  reasonable  assurance  of  the  applicant's  ability  to 
repay  the  loan  within  the  time  fixed  therefor  and  to  meet  its  other 
obligations  in  connection  with  such  loan.  The  Commission  is  of 
opinion  that  the  time  fixed  for  the  loan  should  be  two  years  and  that 
t^e  security  offered,  in  addition  to  the  two-year  notes  of  the  company, 
should  be  the  pledge  of  the  company's  &st-mortgage  bonds  at  the 
ratio  of  1)  to  1. 

«Lao. 


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LOAK   TO  SALT  E4AKE  ft  UTAH  B.  B.  11 

In  view  of  the  limited  appropriation  and  the  genwal  necesutiee  oi 
the  carriers  of  the  country,  the  Commission  is  of  the  opinion  that  an 
advance  by  the  United  States  toward  Uie  payment  of  the  floating 
debt  is  not  necessary  to  enable  the  applicant  properly  to  meet  the  trans- 
portation needs  of  the  public,  and  the  Commission  is  not  convinced 
that  the  exp«iditureB  proposed  for  additional  yard  tracks  and  sidii^ 
or  for  shops  are  of  su(^  nature,  ^en  considered  in  connection  with 
the  general  transportation  needs  of  the  country,  as  to  justify  a  loan 
for  those  purposee.  The  Commission  is,  however,  of  the  opinion 
that  a  loan  of  $64,600  to  enable  the  applicant  to  meet  the  first  payment 
of  (57,988  and  discount  of  (6,626.40  on  equipment  notes  for  equipment 
amounting  to  $271,540  is  necessary. 

An  appropriate  certificate  will  issue. 


Certific(Ue  No.  t  for  a  Loan  under  Section  SIO  of  ike  TranapojiaHon 
Act,  1920. 

The  Interstate  Commerce  Commission  accordingly  certifies  to  the 
Secretary  of  the  Treasury: 

1.  Ite  findings  of  fact:  (a)  That  the  making  of  a  loan  of  $64,600 
by  the  United  States  to  the  Salt  Lake  &  Utah  Railroad  Company 
is  necessary  to  enable  the  applicant  properly  to  meet  the  transports^ 
tion  needs  of  the  public;  and  (6)  that  t^e  prospective  eaining  power 
of  the  said  Salt  Lake  &  Utah  Railroad  Company  and  the  character 
and  value  of  the  security  offered  by  it  are  such  as  to  furnish  reasonable 
assurance  of  the  apphcant's  ability  to  repay  the  loan  within  the 
time  fixed  therefor,  which  is  two  years,  and  to  meet  its  other  obliga- 
tions in  connection  with  such  loan. 

2.  And  its  recommendaUons:  (a)  That  the  loan  he  made  in  the 
amount  of  $64,600;  (6)  that  the  time  from  the  making  thereof  within 
which  the  loan  is  to  be  repaid  be  two  years;  (e)  that  the  character  of 
the  security  which  is  to  be  offered  be  the  notes  of  the  Salt  Lake  & 
Utah  Railroad  Company  further  secured  by  the  deposit  as  collateral 
of  the  first-mortgage  bonds  of  the  S(dt  Lake  &  Utah  Railroad  Company 
issued  under  the  trust  indenture  of  April  1,  1914,  Continental  & 
Commeroial  Trust  &  Savings  Bank,  trustee,  at  the  ratio  of  !(  to  1; 
and  (d)  that  the  terms  and  conditions  of  the  loan  be  fixed  by  the  Secre- 
tary of  the  Treasury  in  aooordance  with  the  foregoing  certified  rec- 
ommendations. 

Done  at  Washington,  D.  C,  this  24th  day  of  May,  1920. 
esLca 


D,=;,lz...,C00gIC 


nrrsBSTATB  coumebcx  oouuissioit  bkfobh. 


FiNANCB  Docket  No.  2. 

ANNOUNCEMENT  OF  PRINCIPLES  TO  BE  OBSERVED  IN 

RECOMMENDING  LOANS  FROM  THE  REVOLVING  FUND. 


JwMt,19tO. 


To  All  Conoehnbd: 

The  Commission  having  on  May  29,  1920,  afforded  opportunity  to 
all  who  wished  to  be  heard  in  regard  to  the  gen«-al  principles  which 
should  control  its  action  in  recommending  to  the  Secretary  of  the 
Treasury  loans  from  the  revolving  fund  of  $300,000,000  created  by 
section  210  of  the  transportiation  act,  1920,  makes  the  following 
announcement : 

BQDIPUENT. 

It  is  essential  that  a  substantial  portion  of  the  fund  be  put  to  work 
at  once  to  aid  in  acquiring  new  equipment.  The  appropriation  for 
this  purpose  will  be  fixed  for  the  present  at  $125,000,000,  to  be  dis- 
tributed substantially  as  follows:  To  aid  in  acquisition  of  freight 
cars,  $75,000,000;  to  aid  in  acquisition  of  locomotives,  $50,000,000. 

Cars. — Since  freight  cars  are  interchanged  and  enter  into  general 
use,  subserving  the  general  transportation  needs  of  the  public  re- 
gardless of  ownership,  the  Commission  will  endeavor  to  apporlaon 
the  $75,000,000  in  such  manner  as  will  bring  about  the  acquisition  of 
the  largest  number  of  cars.  The  National  Association  of  Owners  of 
Railroad  Securities  has  urged  the  organization  for  Uiis  purpose  of  a 
national  equipment  corpOTation.  There  are  strong  considerations 
in  favor  of  such  a  project,  and,  by  a  recent  amendment  to  section  210,  . 
Congress  has  authorized  loans  from  the  revolving  fund  to  such  a 
corporation. 

The  Commission  can  not  undertake  the  formation  of  an  equipment 
corporation  or  corporations,  but  upon  presentation  of  a  definite,  well- 
matured,  and  workable  plan  capable  of  application  in  the  immediate 
future,  it  will  give  preferred  consideration  to  applications  for  loans  to 
or  for  the  purpose  of  such  a  corporation.  The  Commission  believes 
that  it  is  both  desirable  and  practicable  to  devise  such  a  plan  in  the 
case  of  refrigerator  equipment,  and  particulu4y  commends  this 
matter  to  the  attention  of  the  railroad  executives. 

The  $75,000,000  apportioned  for  freight  cars  will  be  used  primarily 
to  aid  in  the  acquisition  of  20,000  refrigerator  cars.  The  allotment 
for  refrigerator  cars  will  be  made  first  to  those  carriers  or  companies 

ssLca 


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FBinom;jBS  to  be  (»aBKVBD  nr  saaoMHSKniNQ  umss.      13 

whidi  offer  the  Iftigest  proportional  oontributiona  to  meet  the  ad- 
vances of  the  gOTemmeat,  and  will  be  contiaued  in  the  order  of  pro- 
portions of  carrier  contributionfl  until  the  total  of  20,000  refrigerator 
cars  is  prorided  for  or  the  applications  are  exhauatdd.  Other  things 
b^ng  equal,  preference  will  be  ^ven  to  loons  to  or  for  the  purpose  of 
equipmwtt  corporations  supplying  the  needa  ci  a  number  of  lines. 

After  providing  allotments  for  refrigerator  cars,  allotments  for 
otJier  freight  cars  will  be  made  in  a  similar  manner  and  witb  similar 
preferences.  Where  carriers,  however,  offer,  free  of  prior  liens, 
mimii^  gear,  parts  of  care,  or  types  of  care  which  by  oonstniotion 
reconstruction,  or  reenforcement  may  be  converted  into  modem  and 
effitnent  equipment  at  an  earlier  date  than  is  possible  by  new  con- 
struction, preference  wUl  be  given  to  carriers  making  such  offer  over 
others  tendering  the  same  or  substantially  the  same  proportional 
contributions  to  meet  the  loans. 

Locomotives. — ^The  (50,000,000  for  locomotives  will  be  used  first 
to  aid  in  acquiring  freight  and  awitcbing  .locomotives  and  will  not 
be  employed  for  passenger  locomotives  until  and  unless  appUcationa 
for  freight  and  switching  locomotives  are  met.  It  will  be  the  rule 
to  require  applicante  themselves  to  contribute  at  least  50  per  cent 
of  the  cost  of  the  locomotives.  Other  things  being  equal,  prefer- 
ence will  be  given  to  applications  for  loans  to  or  for  the  purpose  of 
equipment  corporations. 

If  the  demand  should  be  in  excess  of  the  allotment,  with  the  pos- 
sible exception  of  equipment  corporations,  applications  for  less 
than  25  locomotives  will  first  be  filled,  25  locomutives  will  be  ap- 
plied in  order  to  ih.e  remaining  applications  beginning  with  the 
lowest,  and  the  remainder  will  be  used  to  complete  the  applications 
so  far  as  possible  in  order  beginning  with  the  lowest.  This  will  be 
done  for  the  purpose  of  securing  distribution  of  locomotives  through- 
out the  coimtry. 

Applications  for  loans  to  or  for  equipment  corporations  sought 
in  whole  or  in  part  to  meet  motive-power  needs  of  short  lines  will 
be  considered  in  this  connection. 

The  Commission  will  give  consideration  to  the  applications  of  any 
carriere  unable  to  finance  as  much  as  50  per  cent  of  the  coat  of  freight 
or  switching  locomotives,  and  for  good  cause  shown  will  advance 
the  necessary  amounts  before  recommending  loans  for  the  acquisi- 
tion of  passenger  locomotives. 

ADDITIONS   AND  BETTERMENTS. 

l^e  appropriation  for  loana  to  aid  in  additicns  and  betterments 
which  will  promote  the  moTeaneut  of  cms  will  be  fixed  for  the  pres- 
ent at  $73,000,000. 

66 1.  CO. 


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14  ITITEBSTATB  OOMMBBCE  C0MMI8SI0K  RBPOBTa. 

Loans  for  this  purpose  will  not  be  reconunended  except  upon 
satisfactory  evidence  that  the  additions  and  betterments  will  re- 
Ueve  congestion  or  otherwise  enable  existing  equipment  to  do  more 
work.  Ths  Association  of  Railway  Executives  has  stated  to  the 
Commission  that  its  conmiittee  proposes  to  examine  the  applica- 
tions of  the  various  companies  and  recommend  for  favorable  con- 
sideration the  most  pressing  of  such  additions  and  betterments. 
The  Commission  will  expect  such  reconuuendationa  reflecting  the 
beet  judgment  of  the  executives  in  the  interest  of  the  entire  coun- 
tiy,  and  will  be  guided  in  its  action  by  an  endeavor  to  so  use  the  fund 
that  the  best  net  results  may  be  secured  in  the  movement  of  freight. 

No  loans  for  this  purpose  will  be  recommended  without  satis- 
factory assurance  that  the  govflrmneot  funds  will  be  met  by  such 
contributions  from  the  carriers  as  it  is  within  their  power  to  furnish. 

UATURrriES. 

The  appropriation  for  this  purpose  will  for  the  present  be  fixed 
at  150,000,000. 

The  Commission  will  deal  separately  with  companies  seeking 
loans  to  meet  maturities,  with  due  regard  to  the  principles  an- 
noimced  in  the  following  quotation  from  a  re[>ort  of  the  committee 
of  the  Association  of  Railway  Executives: 

In  the  judgment  of  your  comnuttee, every  effcat  should  be  made  by  exteorion  or 
refunding  whenever  possible,  to  take  caie  ot  aJl  1920  maturities,  and  to  avoid  callit^ 
upon  the  revolving  fund  except  in  extreme  cases  to  protect  the  solvency  of  companies. 

It  will  be  the  policy  of  the  Commission  not  to  recommend  loans  in 
cases  where  applicants  have  not  clearly  exhausted  every  effort  to 
take  care  of  maturities  by  extension,  by  refunding,  and  by  every 
other  means;  and  all  appUcations  for  loans  to  meet  maturities  should 
set  forth  as  definitely  as  possible  by  whom  and  in  what  amounts  the 
maturing  obligations  ore  held  and  what  steps  have  been  taken  to 
extend,  refund,  or  otherwise  provide  for  them.  The  Commission  will 
emphasize  the  necessity  for  self-help  in  all  cases  and  will  expect 
applicants  to  assume  their  fair  share  of  the  burden, 

SHORT  UNBS. 

The  appropriation  for  loans  to  short-line  railroads  will  be  fixed  for 
the  present  at  $12,000,000. 

The  Short  Line  Railroad  Association  should  submit,  in  accordance 
with  the  forgoing  principles,  its  recommendations,  both  with  respect 
to  member  roads  and  with  respect  to  nonmember  lines,  for  the 
distribution  of  this  allobnent  for  ahtnt-line  railroads,  tentatively 
fixed  at  112,000,000. 

ULca 

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FRmrciFLES  TO  BE  OBSmiTBD  IS  BXOOmniTDINa  LOANS.         15 
or  OCNXRAL. 

No  loans  vUl,  be  reconuneDded  for  any  purpoee  except  upon  eri- 
dence  that  the  prospeotire  earning  power  of  t^e  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  fiunish 
reaaonable  anurance  of  the  q>plicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor  and  to  meet  its  other  obligations  in 
OMinection  with  such  loan. 

The  Commission  is  of  the  opinion  that  the  eontributiona  of  private 
capital  to  meet  the  loans  of  the  government  should  be  obtained  at 
reasonable  interest  -charges,  llieee  funds  will  be  invested,  not  alone 
for  the  purpose  of  securing  direct  returns  but  for  the  purpose  of 
gaining  the  indirect  benefits  which  will  accrue  if  carriers  are  «iabled 
better  to  meet  the  txaosportation  needs  of  the  ooimtry.  It  should  be 
possible  to  obtain  these  contributions  in  part  from  the  shippers  of 
the  country  who  are  suffering  from  inadequate  transportation.  A 
proper  spirit  of  cooperation  should  make  it  possible  to  secure  private 
funds  at  rates  not  in  excess  of  the  rate  which  the  government  itself 
accepts.. 

NEW  OB  JUMUIDED  APPLICATIONS. 

Many  of  the  applicataons  which  have  been  filed  with  the  Commis- 
sion are  at  variance  with  the  needs  which  the  applicants  have  indi- 
cated to  the  Association  of  Railway  Executives,  and  applicants  have 
frequently  failed  to  grasp  the  two  prerequisites  which  the  law  affixes 
to  a  recommendation  for  a  loan  under  section  210,  to  wit:  (1)  A 
finding  by  t^e  Commission  that  the  making  in  whole  or  in  part  of  the 
proposed  loan  by  the  government  is  necessary  to  enable  the  appUcant 
properiy  to  meet  the  transportation  needs  of  the  public,  and  (2)  a 
finding  by  the  Comnossiim  that  the  prospective  earning  power  of 
the  applicant  and  the  character  and  value  of  the  security  offered  are 
such  aa  to  fumiA  reasonable  assurance  of  the  applicant's  ability  to 
repay  the  loan  within  the  time  fixed  therefor,  and  to  meet  its  otho- 
obligations  in  connection  with  such  loan. 

Many  appUcations  also  were  filed  or  wit^eld  whfle  amendments 
to  the  transportation  act  were  pending.  It  is  evident  that  a  fair 
and  oconprehensive  administration  of  the  act  reqtures  ^at  ail  appli- 
cations be  amended  or  filed  in  tiie  light  ot  the  principles  above  set 
forth  and  of  tiie  knowledge  now  available  as  to  the  purposes  and 
limits  of  the  law.  Opporttiniiy  will  therefore  be  afforded  to  amend 
and  supplement  applications  abeady  on  file  and  to  file  new  applioa- 
tktna  so  that  all  necessary  information  may  be  supplied  to  enable  the 
Conuni38i<Hi  to  pass  upon  the  pro{»riety  and  expediency  of  recom- 
mmdii^  the  lotias, 

Wher^  applitsations  hav^  been  filed  in'  accordance  with  the  Com- 
mission's order  of  April  23,  1920,  amendments  may  be  made  in  sum- 


16  INTEBSTATBCOWMBRCP   COMMISSION  BBPOBIS. 

mary  form,  referring  to  previoi^s  ^^plic&tioa  and  to  this  circulftr,  and 
setting  forth  the  amount  of  the  loan  now  desired,  Uie  term  for  which 
it  is  desired,  the  purposes  of  the  loan,  and  the  uses  m  which  it  will 
be  applied  within  the  principles  ahove  announced,  the  present  and 
pro9pectiTe  ability  of  the  applicant  to  repay  the  loan  and  meet  tbe 
requirements  of  its  obligations  in  that  regard,  the  character  and 
Talue  of  the  security  Offered,  and  the  extent  to  which  the  public 
convenience  and  necessity  will  be  served.  ITie  amendments  should 
be  verified  and  should  show  authority  from  the  board  of  directors 
S3  provided  in  original  fbnn. 

T^e  original  amendment  or  new  application  ahoold  be  accompanied 
by  11  additional  copies,  and,  ercept  in  cases  of  maturitiea,  one 
additional  copy  should  be  forwarded  to  the  Association  of  Railway 
Executives,  61  Broadway,  New  York,  where  recommendations  are 
to  be  made  by  that  body,  and  one  additional  copy  of  shortt-line 
amendments  or  new  applications  should  be  forwarded  to  the  American 
Short  Line  Railroad  Association,  706-713  Union  Trust  Buildii^, 
Washington,  D.  C. 

Amendments  and  new  applications  should  particularly  show — 

1.  In  case  of  equipment  loans,  (a)  the  kind  and  number  of  units 
and  cost  per  unit  and  total  cost,  (&)  the  contribution  to  be  made 
by  the  carrier  to  meet  total  cost  and  how  such  contribution  will  be 
financed,  (c)  whether  it  is  proposed  to  employ  the  loan  to  secure 
cars  to  be  placed  under  control  ot  a  refrigerator-car  company  or 
oiher  equipment  corporation,  or  to  secure  cacs  for  tndiridufd  equip- 
ment of  the  applicant. 

2.  In  case  of  loans  for  addhuxis  and  bettwments,  {a)  why  appli- 
cant  is  unable  itaelf  to  finance  the  project,  (b)  what  ^orts  applicant 
has  made  to  do  the  work  without  government  aid,  (c)  how  and  to 
what  extent  proposed  additions  and  betterments  will  facilitate  the 
movement  of  cars,  (,d)  the  plan  and  details  of  cost  of  tba  work  pro- 
posed, and  (e)  the  proportion  of  total  cost  whieli  will  be  financed 
by  the  applicant. 

8.  In  case  of  loans  for  maturities,  (a)  what  efforta  carrier  has  made 
to  finance  the  maturities  by  extension,  refunding,  or  other  nkeans, 
ib)  as  far  as  possible  by  whom  and  in  what  amoonts  the  maturii^  ob- 
ligations are  held  and  the  reasons  the  holders  give  for  failare  or  refusal 
to  extend  or  refund,  (<)  how  much  of  the  burden  of  financing  the 
maturities  applicant  i»opases  to  itself  assume  and  how,  (d)  why 
applicant's  regular  bankers  have  been  unable  to  come  to  its  assist- 
ance, («)  wliether  the  aid  of  oUier  bankers  has  been  solicited  or 
public  bids  invit«d,  and  (/)  whether  there  is  on  applicant's  boani 
of  directors  any  member  who  is  an  officer,  director,  or  representative', 
of  any  bank,  bankaia,  or  trust  company,  stating  big  name  and  posi- 
tion. 

«.i.p.a 

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PBINGIPUtS  TO  BE  <»SEKVED  IH  BSCnMUZTDnTO  UDAHB.         17 
TDCB    BXTINDSD    TOR    FIUNO    APPL10ATK>NS    AKD   AMXMDHENTS. 

The  time  for  filing  applications  and  amendments  for  consideration 
in  the  first  general  plui  of  distribution  is  extended  to  June  9,  1920. 
At  the  hearing  on  May  29,  1920,  the  representatives  of  the  Associa- 
tion ci  Railway  Executives  indicated  tbat  the  aasociation  wonld 
submit  recoDUnondations  as  to  the  amonnta  to  be  apportioned  to  the 
several  roads  out  of  the  appropriation  for  each  general  purpose 
upon  statement  by  the  Commission  of  rules  of  apportionment.  It 
is  desired  that  such  recommendations  be  furnished  so  that  the 
gmeral  distribution  may  commence  not  later  than  June  26,  1920. 
In  the  meantime,  however,  the  Commission  will  continue  to  act 
npon  such  individual  applications  as,  in  its  judgment,  require  im- 
mediate attention. 
M344°- 


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IKTSBSTATB  COUH^KCK  COUHISSION  EBFOBTS. 


Finance  Docket  No.  5. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  SOUTH- 
ERN PACIFIC  COMPANY  FOR  AUTHORITY  TO  CONTINUE 
ISSUE  OF  COMMON  CAPITAL  STOCK  IN  EXCHANGE  FOR 
CONVERTTBLB  BONDS. 


Svbmitttd  June  6,  JMO.    Decidtd  Jtmt  lt,'i 


Authority  granted  u  of  June  28,  1920,  to  inue  common  capital  stock  in  ndiange  tat 
and  i^aiort  (be  mirrender  and  cancellation  of  an  equal  amount  in  pai  value  of 
6  per  cent  20-year  convertible  gold  bonds  in  accordance  with  the  ttmrn  ot  a  cer- 
tain tniat  indenture  dated  Juno  1 ,  1914. 
A.  D.  McDonalA  for  applicant. 

Repobt  and  Obdkb  or  the  Cohkission. 
Division  4,  ComnfisioNEBB  Meyek,  Daniels,  Eastman,  and 

PoTTEB. 

Bt  Division  4; 

It  appeartTig,  Tliat  the  Southem  Pacific  Company  has  petitioned 
this  Commission  for  authority  under  section  20a  of  the  interstata 
commeice  act  to  continue  the  issue  of  its  common  capital  stock  in 
ezchan^  for  and  against  the  surrender  and  cancellation  of  an  equal 
amount  in  par  value  of  its  5  per  cent  20-year  convertible  gold  bonds, 
in  accordance  with  the  terms  of  the  indenture  dated  June  I,  1914, 
under  which  said  bonds  were  issued;  and  full  investigation  of  the 
matters  and  facts  therein  involved  having  been  had;  and  it  appear- 
ing that  under  the  terms  of  said  indenture  the  entire  bond  issue 
thereunder  will  become  due  and  payable  on  default  of  said  exchange 
on  demand;  and  it  further  appearing  ihikt  copy  of  said  petition  has 
been  filed  with  the  governor  of  each  state  in  which  said  carrier 
operates,  as  provided  in  the  aforesaid  section;  and  the  Commission, 
after  due  consideration  of  all  the  evidence  submitted,  being  of  the 
opinion  that  said  petition  should  be  allowed: 

It  U  ordered,  That  the  Southem  Pacific  Company  be,  and  it  is 
hveby,  authorized  to  continue,  in  accordance  wiUi  and  pursuant  to 
the  Uinaa  of  a  certain  indenture  of  date  June  1,  1914,  between  peti- 
tioner and  die  Central  Trust  Company  of  New  York,  a  true  copy  of 
which  is  on  file  in  this  proceeding,  the  issue  of  ita  common  capital 
stock  out  of  the  remaining  duly  authorized  and  unissued  shares  of 
the  £50,000  shares  of  the  afxregata  par  value  (rf  $55,000,000  reserved 

6SI.0.G. 


ISBUB  OF  STOCK  BT  SOUTHSBIT  PACUIO  00.  19 

for  the  pnrpose  under  the  aforesaid  indeoture,  Id  ezohange  for  and 
against  the  surrender  and  cancellation  of  an  equal  amount  in  par 
value,  at  therate  of  $100  per  share,  of  its  5  per  cent  20-year  con- 
vertible gold  bonds  due  and  payable  June  1,  1934,  issued  under 
aforesfud  indenture,  on,  or  at  any  time  before,  June  1,  1924,  but 
not  later;  or,  if  before  that  date,  all  but  not  part  of  said  bonds  at 
the  time  outstanding  are  called  for  redemption,  then  prior  to  30 
days  before  the  redemption  date. 

It  i$  further  ordered,  That  all  of  said  common  capital  stock  not 
issued  by  midnight  of  June  1,  1924,  as  provided  in  said  indenture, 
shall  be  issued  or  otherwise  disposed  of  only  on  order  from  this 
Commission. 

And  it  is  further  ordered,  That  this  order  take  effect  on  the  28th 
day  of  June,  A.  D.  1920,  and  continue  in  force  until  otherwise  ordered 
or  amended  by  this  Commission. 

65Laa 


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IirrERSTAlV  COIIMBBGB  OOUingfflOH  VMBOaTO. 


FiNANCB  Docket  No,  920. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  ARANSAS 
HARBOR  TERMINAL  RAILWAY  FOR  A  LOAN  FROM  THE 
UNITED  STATES. 


SiiAmUUd  Jaw  It,  1910.    Decided  Junt  tt,  19tO. 


Application  granted  in  part  and  loan  of  1136,000  approved. 
J.  D.  Wheeler  for  applicant. 

U.  S.  Pawkett  for  San  Antonio  Freight  Bureau  and  southwest 
Texas  shipping  interests. 

Report  of  the  Cohuission. 
DmsiON  4,  CouHissioNEBS  MsTEB,  Daniels,  and  Eastman. 
Bt  Division  4: 

The  Aransas  Harbor  Terminal  Rulwaj,  a  carrier  by  railroad 
subject  to  the  interstate  commerce  act,  has  made  application  to  the 
Interstate  Commerce  Commission  for  a  loan  from  the  United  States 
in  accordance  with  section  210  of  t^e  transportation  act,  1920,  as 
amended. 
In  sud  application  the  carrier  sete  forth: 

1.  That  the  amount  of  the  loan  desired  is  $39S,999.24. 

2.  That  the  tenn  of  the  loan  desired  is  five  years,  with  the  option 
of  applying  not  less  than  $100,000  at  the  end  of  any  year  during  iha 
loan  period. 

3.  That  the  purpose  of  the  loan  and  the  use  to  which  it  is  to  be 
applied  are  as  follows : 

To  enable  the  applicant  to  reconstruct  its  road  between  Aransas 
Pass,  Tex.,  and  Port  Aransas,  Tex.,  which  was  so  badly  damaged  by 
tJie  hurricane  of  September  14,  1919,  as  to  make  it  necessary  to  vir- 
tually reconstruct  its  main  tine.  A  summary  of  the  cost  of  recon- 
struction is  given  as  follows: 

Repain  to  exiating  trestlei f76,226.02 

Construction  of  new  trestles 223, 512.  H 

Railroad  on  embankment  at  east  end  of  main  line  including  industry 
tiackB  and  yards  on  Harbor  Island 30, 2eL  76 

Subtotal 329,999.34 

WLca 


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UOJlS  to  ASXSSAS  HAEBOB  TEBMIITAL  BT.  21 

OontiiwenciM,  16  per  cent. |49, 499. 90 

Engiiie  uid  crew  uid  floating  equipment  necex^y  in  this  constmction 

work»tW0perd»yfor200d»ye 12,00a00 

Engineering 2,  600l  00 

Immnce 6,  OOft  00 

Total 398,999.24 

4.  That  the  preeeot  and  prospective  ability  of  the  applicant  to 
repay  the  loao  and  meet  the  requirementa  of  its  obligations  in  that 
regard  ia  as  shown  in  the  application,  and  particularly  in  a  printed 
argument  of  applicant  before  the  Interstate  Commerce  Commission, 
which  is,  briefly,  ttiat  the  prospect  is  that  the  traffic  hauled  by  appli- 
out  through  the  port  will  rapidly  increase,  and  that  annual  earnings 
of  (400,000  are  in  sight,  with  tlOO,000  additional  as  soon  as  coast- 
wise steamship  service  is  inaugurated  between  New  York  and  Port 
Aransas. 

5.  That  the  security  offered  is  a  first  lien  on  all  property  of  every 
character  whatsoever  now  owned  by  the  applicant  or  to  be  acquired 
by  it  during  the  loan  period  and  until  the  loan  is  paid  in  full  with 
delivery  to  the  United  States  by  the  bondholders  of  all  of  the  first- 
mortgage  bonds  which  lia.ve  been  issued  by  the  applicant  under  the 
laws  of  Texas  and  based  upon  the  valuation  fixed  by  the  Railroad 
Commission  of  Texas,  tc^ether  with  waiver  on  the  part  of  the  bond- 
holders of  their  lien  on  the  property.  Such  further  action  will  be 
taken  by  the  applicant,  the  trustee,  and  the  bondholders  as  may  be 
deemed  necessary  by  the  United  States  to  create  in  favor  of  the 
United  States  a  first  lien  secured  by  first  mortgage  on  all  property 
now  owned  or  hereafter  to  be  acquired  by  the  applicant.  As  to  the 
adequacy  of  the  security,  reference  is  inade  to  the  printed  argument 
of  applicant  mentioned  in  section  4  above. 

6.  That  the  public  convenience  and  necessity  will  be  served  by  the 
use  of  this  loan  for  the  purpose  of  reconstructing  applicant's  road  is 
emphasized  in. answer  to  question  7  of  the  form  of  application. 

The  application  sets  forth  such  further  facts  and  details  as  the  Com- 
misfflon  required  with  respect  to  the  physical  situation,  ownership, 
capitalization,  indebtedness,  contract  obligations,  operation,  and  earn- 
ing power  of  the  applicant,  together  with  such  other  facts  relating  to 
the  propriety  and  expediency  of  granting  the  loan  applied  for  and  the 
ability  of  applicant  to  make  good  the  obligation  as  the  Commission 
deemed  pertinent  to  the  inquiry  and  required  to  be  shown  in  the 
application. 

A  hearing  was  afforded  applicimt  on  May  29,  1920,  in  connection 
witii  the  general  hearing  in  I^ncipUa  to  be  Observed  tn  Recommend- 
ing Leant,  65  I.  C.  C. ,  12,  at  which  arguments  were  offered  in  favor 
irfthe  application  by  J.  D.  Wheeler,  of  Aransas  Pass,  Tex.,  applicant's 
vice  president,  appearing  for  the  Aransas  Harbor  Terminal  Kailway, 

KLCa 


22  nrCBBSTATB  OOHSCBBCIE  COHMISSION  BBPOBTS. 

and  U.  S.  Pawkett,  of  San  Antonio,  Tex.,  appearing  for  tite  Smn 
Antonio  Freight  Burean  ancHtoUt^west  Texas  stupping  interests. 

The  company  owns  and  operates  10.47  miles  of  first  track  and  10.62 
miles  of  yard  track  and  sidings,  the  principal  termini  heing  Aransaa 
Pass  and  Port  Aransas. 

The  character  of  the  traf&c  handled  by  the  Aransas  Harbor  Termi- 
nal Railway  is  indicated  by  the  following  analysis  of  its  rul4ine 
transportation  revenues  for  the  year  1918  (l&test  available) : 

Freight  revenue 164,993.27  97.2  per  cent. 

PuBenger  revenue 1, 762. 26  2. 6  per  cent. 

Switching  revenue 128. 00  . 2  per  cent 

Total 66,883.63  100     pw  cant. 

The  character  of  its  freight  traffic  is  indicated  by  an  analysis  of 
tonnt^  for  the  year  1918  (latest  available) : 

Producta  of  mlDM 88,697  tons.  9C.  3  per  cent. 

Products  of  forests ". 1,347  tons.  1.4  per  cent 

Manutwturea 2, 739  tons.  3     per  cent 

All  other  treigfat 288  tons.  .3 percent 

Total 92,971tonji.  100     percent 

The  equipment  of  applicant  on  December  31,  1919,  consisted  of 
two  steam  locomotives,  one  flat  car,  one  passenger  coach,  and  one 
company-service  cw, 

For  the  years  ended  June  30,  1913  to  1916,  inclusive,  and  for  the 
years  ended  December  31,  1916  to  1919,  inclusive,  the  amounta  of 
net  income,  or  net  deficit,  after  deducting  fixed  chaises,  were— 

Year  ended  June  30, 1B13 f5,S94.t7  net  deficit. 

Year  ended  June  30, 1914 27,578.80  net  income. 

Year  ended  June  30, 1915 10,892.32  net  income 

Year  ended  June  30,  1916 7,226.26  net  income. 

Year  ended  Dec.  31, 1916 15,tS8.84  net  deficit. 

Year  ended  Dec.  31, 1917 t0,tt8.80  net  defidL 

YearendedDec.  31, 1B18 7,608.81  net  deficit. 

Year  ended  Dec.  31,  1919 19, 967.  St  net  defidL 

For  the  three  months  ending  on  March  31,  1920,  the  net  defidt 
was  S16,860.94. 
The  general  balance  sheet  as  of  March  31,  1920,  shows: 

Investment  in  road  and  equipment $446,666.17 

Other  aaeeta 143,062.79 

Liabilities: 

Capital  stock 100,  OOa  00 

Funded  debt  unmatured 294, 000. 00 

Loana  and  bills  payable 211, 164. 26 

Interest  matured  unpaid 68,060.00 

Accrued  depreciation  (n  equipment. 6, 220. 36 

Otlier  liabiUtiea 16,632.86 

Profit  and  lose— Debit  balance 96,878.60 

60 1. 0.  a 


LOAN  lO  AEJlSSAB  habbob  tebvinal  kt.  28 

Upon  conndflration  of  tiu  oiiginal  &pplicatioii  and  of  all  the 
evidence  adduced  in  support  thereof,  it  was  the  judgment  of  the  Com- 
misstou  that,  in  view  of  ^e  email  amount  available  out  of  the  revolv- 
ing fond  for  such  purposes  when  compared  with  the  transportataon 
needs  of  the  country  as  a  whole,  and  in  accordance  with  the  principle 
of  self-help  estabU^ed  by  Uie  Commission  for  the  administration  of 
the  fund  and  because  of  the  deficits  in  Ofterating  resulte  shown  by 
applicant  and  the  doubt  concerning  the  engineering  possibilities  of  the 
project,  the  full  amount  of  the  loan  sought  ought  not  to  be  granted;  and 
that  no  part  of  the  aid  applied  for  should  be  extended  until  and  unless 
the  owners  and  security  holders  of  the  applicant,  and  the  people  of 
the  sections  to  be  benefited  who  spoke  in  applicant's  behftlf,  should 
exemplify  thek"  needs  and  t^eir  faith  in  the  remedies  proposed  by 
taking  their  respective  shares  of  the  risk  and  financial  burden.  This 
decision  was  made  known  to  the  represen  tatives  of  the  company  and  of 
the  shipping  interests  involved,  at  the  hearing  on  May  29,  1920,  and 
although  those  representatives  were  at  that  time  unable  to  say  what 
could  be  accomplished  in  thisr^ard,  leave  to  amend  the  application  was 
requested  and  granted  and  an  amended  application  has  been  filed. 

In  its  supplemental  application  the  carrier  indicates  that  if  the 
United  States  will  advance  one-half  of  the  amount  necessary  to  re- 
construct the  line,  or  $200,000  out  of  a  total  of  about  $400,000,  tbe 
applicant  will  be  able  to  raise  the  remainder.  In  conference  with  die 
representatives  of  the  shippers  and  of  the  carrier,  it  has  appeared  that 
the  plans  contemplate  equal  contribuUons  by  the  railroad  and  by 
the  shipping  interests.  It  is  the  judgment  of  the  Commission  that 
the  shipping  interests  and  the  owners  of  the  property  should  sevM'ally 
contribute  amounts,  respectively,  equal  to  tbe  amount  to  be  contrib- 
uted by  the  Uiuted  States,  and  it  appears  from  conferences  with  the 
representatives  of  these  interests  that  such  arrangements  can  prob- 
ably be  made.  The  Commission  further  finds  that  if  the  United 
States  is  ^ven  a  first  lien  upon  all  the  properties,  rights,  and  fran- 
chises of  the  carrier  in  preference  not  only  to  all  existing  security 
holders  and  mdebtedness,  but  also  to  the  contributions  to  be  made  by 
the  carrier  and  by  the  shipping  interests  as  is  now  proposed,  the  pros- 
pective earning  pow'er  of  Uie  applicant  and  the  character  and  value 
of  the  security  offered  are  such  as  to  furnish  reasonable  a-ssurance 
of  the  applicant's  ability  to  repay  the  loan  within  the  tame  fixed  there- 
for, and  to  meet  its  other  obligations  in  connection  with  such  loan. 

Tbe  Commisfflon  further  finds  that  the  making  of  the  proposed 
loan  to  the  extent  of  $135,000  is  necessary  to  enable  applicant  prop- 
erly to  meet  the  transportation  needs  of  the  public.  And  it  is  ac- 
cordingly ordered  that  the  following  certificate  be,  and  the  same  is 
hereby,  made  to  the  Secretary  of  the  Treasury. 
SB  I. CO. 


ly  Google 


24  imSBSTATB  OOUHEBOB  OOHHBBIOlfr  BBPOBTS. 

CerUficaie  No.  S  far  a  Zoon  unier  SeeHon  £10  qfihs  Tronaportatitm 
Act,  W£0,  as  Amended. 

The  loterstata  Commerce  Commission  certifies  to  Uie  Secretary 
of  the  Treasury: 

1.  Its  findinjgs  of  fact:  (a)  That  the  making  of  a  loan  of  $135,000 
by  the  United  States  to  the  Aransas  Harbor  Terminal  Railway  is 
necessary  to  enable  the  applicant  properly  to  meet  the  ta'ansportation 
needs  of  the  public;  (b)  that  the  expenditures  for  addiUons  and 
betterments  proposed  are  more  than  equal  to  the  loan;  (c)  that 
the  prospective  earning  power  of  the  said  Aransas  Harbor  Terminal 
Railway  and  the  character  and  value  of  the  security  offered  by  it 
ate  such  as  to  furnish  reasonable  assurance  of  the  apphcant's  ability 
to  repay  the  loan  within  the  time  fixed  therefor,  which  is  outlined 
in-paragraph  (&)  of  section  2  following. 

2.  And  its  recommendations:  (a)  That  the  loan  be  made  in  iJie 
amount  of  $135,000;  (()  that  the  time  from  the  making  thereof 
within  which  the  loan  is  to  be  repaid  be  15  years,  in  12  payments  of 
$10,000  each,  due  at  the  end  of  the  third  to  the  fourteenth  years  of 
the  term,  inclusive,  and  in  1  payment  of  $15,000,  due  at  the  end  of 
the  fifteenth  year  of  the  term,  with  option  to  the  carrier  to  repay 
any  installment  at  any  time  before  due;  (e)  that  the  character  of 
the  security  which  is  to  be  offered  be  the  notes  of  the  applicant, 
bearing  interest  at  the  rate  of  6  per  cent  per  annum,  payable  semi- 
annuaUy  to  the  Secretary  of  the  Treasury,  and  secured  as  to  principal 
and  interest  by  (1)  a  first  lien  on  the  railroad  and  property  of 
every  character  now  owned  by  apphcant  or  hereafter  acquired  by  it; 

(2)  a  first  lien  on  rolling  stock,  fioating  equipment,  and  equipment 
of  every  character  now  owned  or  hereafter  acquired  by  applicant; 

(3)  a  first  lien  on  all  rents,  issues,  profits,  and  income  of  or  in  respect 
to  all  property  now  owned  or  hereafter  acquired  by  applicant, 
includii^  income  earned,  income  to  be  earned,  and  income  to  which 
applicant  may  either  now  or  hereafter  be  entitled;  (4)  a  first  lien 
upon  all  the  franchises,  rights,  and  privil^j^  of  applicant  now  held 
or  hereafter  acquired;  (6)  a  first  lien  upcm  all  real  and  personal 
property  and  rights  of  property  now  held  or  hereafter  acquired  by 
applicant;  (6)  the  pledge  and  delivery  for  further  security  to  die 
United  States  by  the  stockholders  and  bondholders,  by  the  company, 
and  by  the  trustees,  of  all  the  capital  stock,  bonds,  notes,  and  other 
evidences  of  interest  in  or  indebtedness  of  the  applicant  which  have 
been  issued  or  authorized,  together  with  a  waiver  on  the  part  of  the 
bondholders  and  trustees  in  favor  of  the  United  States  of  any  lien 
now  existing  on  any  of  the  property,  equipment,  income,  or  frao- 
ohises  of  the  company,  such  further  action  to  be  taken  by  the  appli- 
cant, trustees,  and  bondholders  as  may  be  necessary  to  create  and 

ftS  I.  c.  c. 


L013T  TO  ABAHSAS  BARSOB  nBHINAL  BT.  26 

protect  all  of  the  foregoiI^;  liens,  righto,  and  eecurities  in  favor  of  the 
United  States;  and  (d)  that  the  tenna  and  conditions  of  the  loan  be 
fixed  by  the  Secretary  of  the  Treasury  in  accordance  with  the  foregoing 
oerUfied  reconunendations,  and  that  in  the  event  of  default  in  the 
due  and  punctual  payment  of  any  installment  of  interest  and  prin- 
cipal, provision  be  made  for  the  right  of  the  United  States  to  enter 
and  hold  the  premises  and  collect  uid  receive  all  tolls,  earnings, 
income,  rents,  issues,  and  profits,  and,  in  its  discretion,  to  sail  the 
property  and  appurtenances  and  to  apply  the  purchase  price  to  the 
satisfaction  of  principal,  interest,  and  costs. 

No  payment  shall  be  made  by  the  United  States  on  the  loan  until 
a  total  of  (270,000  shall  have  been  subscribed  and  paid  in  for  the 
project  by  the  security  holders  and  shipping  interests,  and  the 
certificate  of  the  deposit  of  such  funds  in  trust  for  the  project  shall 
be  furnished  the  Secretary  of  the  Treasury  of  the  United  States, 
whereupon  the  Secretary  of  the  Treasury  of  the  United  States  shall 
deposit,  or  cause  to  be  deposited,  with  a  depositary  of  the  United 
States  the  sum  of  $136,000,  subject  to  the  order  of  the  appUcant, 
from  time  to  time,  in  the  amount  of  one-third  of  estimates  prepared 
and  certified  to  by  the  chief  engineer  of  the  applicant  for  tabor  and 
materials  actually  incorporated  in  the  work  and  for  which  payment 
is  then  due,  and  accompanied  also  by  a  receipt  covering  the  payments 
of  the  other  two-thirds  of  each  estimate  out  of  the  trust  funds. 

Immediately  after  the  completion  of  the  project  a  completion 
report  of  the  project  shall  be  made  to  the  Secretary  of  the  Treasury 
of  the  United  States  and  any  part  of  the  said  (135,000  then  remaining 
shall  be  at  once  appUed  to  tJie  repayment  of  the  loan  from  the  United 
States. 

All  estimates  shall  be  subject  to  check  in  the  maimer  that  seems 
expedient  before  acceptance  and  approval.  The  liens  of  the  United 
States  shall  be,  and  shall  be  kept,  superior  to  any  liens  created  in 
respect  of  such  contributions  by  others,  as  well  ss  superior  to  all 
other  Uena  and  claims,  and  no  repayments  shall  be  made  on  account 
of  auch  contributions  or  on  account  of  any  funded  debt  until  the 
amount  of  the  loan  from  the  United  States  is  liquidated  and  paid  in 
full. 

Done  at  Washington,  D.  C,  this  22d  day  of  June,  1920. 

esLaa 


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mXBSBSTATB  OOHUBBOB  OOUMiaSIOX  BBPOSIB. 


Finance  Doohet  No.  931. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  CARO- 
LINA, CLINCHFIELD  &  OHIO  RAILWAY  FOR  A  LOAN 
FROM  THE  UNITED  STATES  TO  MEET  MATURING  OB- 
LIGATIONS AND  TO  PROVIDE  EQUIPMENT  AND 
OTHER  ADDITIONS  AND 'BETTERMENTS. 


Btibmitled  Jum  IS,  1920.    Deoided  June  S6,  19S0. 


AppUcatlOD  granted  Id  part  and  a  loan  of  |3/)00,000  approved. 
N.  S.  Meldrum  for  applicant. 

Report  of  the  Cohhission. 
DmaioN  4,  CoHuisuoNERs  Metxr,  Daniels,  and  Eastman. 

Bt  Division  4 : 

The  Carolina,  Clinchfield  &  Ohio  Railway,  a  carrier  by  railroad 
subject  to  the  interstate  commerce  act,  on  May  29,  ld20,  made  ap- 
plication to  the  Interstate  Commerce  Commission  for  a  loan  from 
the  United  States  to  meet  maturing  indebtedness  and  for  other 
purposes,  in  accordance  with  section  210  of  the  transportation  act, 
1920,  as  amended,  and  on  June  18,  1920,  the  applicant  amended  the 
application. 

In  said  application  the  carrier  sets  forth: 

1.  That  the  amount  of  the  loan  desired  was  $5,000,000. 

2.  That  the  term  for  which  the  loan  was  desired  was  five  years, 
and  that  the  applicant  desired  the  loan  of  the  full  amount  for  the 
full  period,  but  with  provision  that  the  loan  might  be  paid  off  be- 
fore maturity,  in  the  event  of  financial  conditions  favoring  the 
financing  thereof  through  channels  other  than  the  United  States. 

3.  That  the  purpose  of  the  loan  and  the  use  to  which  it  would 
be  applied  wer6  the  payment  of  short^time  notes  and  acceptances 
in  the  amount  of  $4,124,000,  and  the  payment  of  equipment-trust 
obligations  maturing  in  the  years  1920  and  1921,  and  interest  on 
equipment-trust  obligations  during  those  years,  amounting  in  the 
aggregate  to  $2,037,500.  Applicant  would  also  be  required  to  make 
expenditures  of  $93,000  for  additional  equipment  during  1920,  and 
additional  facilities  in  the  nature  of  betterments  to  way  and  struc- 
tures requiring  during  1920  an  estimated  expenditure  of  approxi- 
mately $600,000. 

«6i.aa 

DiqitizedbvCoOt^lc    ■ 


UUJS  TO  OABOUHA,  OUSOHJnXU)  A  OHIO  BT.  27 

4.  The  present  and  prospective  ability  of  the  applicant  to  repay 
the  loan  and  meet  the  requirements  of  its  obligations  in  that  regard. 

5.  That  the  security  offered  was  $10,000,000  of  consolidated-mort- 
gage bonds  of  Um  Carolina,  CUnchSeld  A  Ohio  Bailvay,  oat  of  a 
total  authorized  issue  of  $80,000,000,  the  remaining  $20,000,000  to  be 
neerved  to  retire  as  they  mature  other  existing  obligations;  this 
mmtgage  to  be  submitted  in  usual  form,  containing  provisions  satis- 
factory to  the  Interstate  Commerce  Commission,  and  to  cover  all 
of  the  property  of  the  applicant. 

6.  That  the  public  convenience  and  necessity  -would  be  served  by 
the  extension  of  the  loan  in  that  applicant  had  maturing  obligations 
which,  if  not  met,  would  be  the  basis  of  proceedings  which  would 
prevent  the  respondent  from  operating  its  railway,  and  that  there 
was  cause  to  apprehend  that  funds  to  pay  said  obligations  could  not 
be  obtained  on  reasonable  terms. 

The  application  included  statements  showing  in  detail  other  facts 
required  by  the  Commission  with  respect  to  the  physical  situation, 
ownership,  capitalizatitm,  indebtedness,  contract  obligations,  oper- 
ation, and  earning  power  of  t^  applicant,  together  with  such  other 
facts  relating  to  the  propriety  and  expediency  of  granting  the  loan 
applied  for  and  the  ability  of  the  applicant  to  make  good  the  obliga- 
tion, as  the  Commission  deemed  pertinent  to  the  inquiry  and  required 
to  be  shown  in  the  application. 

On  June  18, 1920,  the  applicant  filed  its  supplemental  application, 
showing : 

(a)  Efforts  which  the  carrier  had  made  to  finance  its  maturities 
by  extension,  refunding,  or  other  means,  in  respect  of  which  it  was 
set  forth  that  the  maturities  which  applicant  must  immediately  pre- 
pare itself  to  take  care  of  consist  of  $2,000,000  of  10-year  notes  ma- 
turing July  1, 1820;  $1,300,000  of  Elkhom  extension  first-mortgage  6 
per  cent  notes,  the  payment  of  which  was  extended  until  January  1, 
1922,  on  condition  that  applicant  place  them  with  another  holder 
not  later  than  July  1  1920;  and  short-time  notes  and  acceptances 
referred  to  in  the  original  application,  making  an  aggregate  of 
upward  of  $7,000,000.  That  the  notes  and  acceptances  are  held  by 
muiy  institutions,  and  have  been  placed  from  time  to  time  to  obtain 
funds  with  which  to  retire  similar  short-time  obligations;  that  the 
applicant  has  been  continually  in  touch  with  financial  institutions 
holding  said  obligations,  and  has  endeavored  to  have  them  carried, 
and  has  hod  them  carried  down  to  the  present  time,  but  that  finan- 
cial conditions  are  such  at  the  present  time  that  it  is  no  longer  pos- 
sible, as  applicant  is  advised  and  believes,  to  continue  to  place  audi 
short-time  obligations. 

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S8  nTTEBST&TB  OOUMBBOB  OOUUISSION  BBPOBTS. 

(b)  That  ander  existing  cooditions  the  holdsFB  of  said  maturing 
obligations  are  not  able  and  willing  to  handle  and  carry  these  and 
similar  obligations. 

(e)  That  applicant  is  of  the  opinion  that  if  fends  can  be  obtained 
from  the  United  States  government,  through  the  Commission,  in 
the  amount  of  $2,000,000,  applicant  will,  with  the  aid  of  its  stock- 
holders  be  able  to  handle  and  take  care  of  for  a  reasonable  time, 
and  perhaps  permanently,  its  additional  maturing  obligations. 

And  further  ampli^lng  its  original  applicatitm  applicant  showed 
that  the  total  revenue  tonnage  carried  during  the  years  1917t  1918, 
and  1819,  respectively,  was  as  follows : 

1917 4,028,602  tons. 

1918 4,222,070  tons. 

1919 6,872,079  tons. 

and  the  tonnage  now  moving  and  all  other  prospects  indicate  that 
the  continuance  of  the  average  increase  shown  during  the  years  1917, 
1918,  and  1919  may  be  conservatively  relied  upon. 

An  informal  hearing  was  afforded  the  representatives  of  the  appli- 
cant, and  after  hearing  and  investigation  it  appears  tiiat  there  is 
no  doubt  that  the  Carolina,  Clinchfield  &  Ohio  Railway  fills  an  im- 
portant transportation  need  in  tho  territory  which  it  serves.  It  is 
an  important  coal-originating  line,  supplying  the  markets  of  the 
southeast.  The  loan  is  recommended  by  the  Association  of  Rait- 
way  Executives,  as  set  forth  in  a  letter  dated  June  19,  1920,  from 
A.  P.  Thom,  general  counsel  of  that  association.  The  railway,  in  its 
amended  application,  offers  to  exemplify  its  exprussed  belief  in  the 
property  by  itself  taking  care  of  obligations  amounting  to  approxi- 
mately $5,000,000,  provided  tho  United  States  advances  the  loan  of 
$2,000,000  requested.  It  also  appears  that  the  assistance  requostod 
of  the  government  is  reasonably  necessary  to  enable  the  applicant 
to  finance  its  obligations  at  this  time. 

The  Commission  therefore  finds  that  the  making  of  the  proposed 
loan  to  the  extent  of  $2,000,000  by  the  United  States  is  necessary  to 
enable  the  applicant  properly  to  meet  the  transportation  needs  of  the 
public. 

At  the  hearing  before  the  Commission  upon  its  supplemental  appli- 
cation, applicant  offered,  in  lieu  of  the  consolidated-mortage  bonds 
offered  in  its  original  application,  the  extension  of  $2,000,000  of 
10-year  notes,  maturing  by  extensitxi  July  1,  1920,  as  security  £or  .a 
loan  of  the  same  amount.  These  notes  are  part  of  the  issue  known  as 
Carolina,  Clinchfield  &  Ohio  10-year  5  per  cflnt  notes,  with  original 
maturity  of  July  1, 1919,  extended  to  July  1, 1920.  The  total  amount 
of  these  notes  originally  issued  and  provided  for  in  the  mortgage 
dated  July  1,  1909,  to  the  Equitable  Trust  Company  of  Nerw  York, 

C5 1.  C.  C. 


LOUT  TO   OABOLmA,  GLUTOHFIELD  A  OHIO  BT.  29 

trastee,  vm  $6,000,000,  but  in  July,  1913,  $3,000,000  of  these  notes 
were  retired  in  a  readjustmant  of  tlie  finances  of  the  Cumberland- 
Corporation,  and  in  September,  1913,  the  remaining  $2,000,000  were 
giv«i  the  privilege  of  conversion  into  preferred  stock  of  the  railway 
at  par. 

By  section  8  of  article  I  of  the  mortgage,  dated  July  1, 1909,  made 
to  secure  the  10-year  6  per  cent  mortgage  gold  notes  of  a  total  author- 
ized issue  of  $5,000,000,  prorision  was  made  for  the  redemption,  in 
certain  circumstances,  of  all  or  any  of  the  said  notes,  at  the  option 
of  the  railway,  and  it  was  provided  that  all  notes  redeemed  should 
immediately  be  delivered  to  and  be  cancried  by  the  trustee,  and  no 
notes  should  be  issued  in  substitution  therefor.  But  by  an  agree- 
ment dated  the  SOtb  day  of  June,  1919,  between  the  Carolina,  Clinch- 
field  &  Ohio  Railway  and  Blair  &  Company,  and  such  persons,  tirms, 
and  corporations  as  were  tben  or  might  become  owners  of  the  10-year 
6  per  cent  mortgage  gold  notes  of  the  railway,  and  as  mi^t  become 
parties  to  the  agreement  in  the  mumer  therein  provided,  Blair  A 
Company  agreed  to  acquire  all  of  the  outstanding  notes,  amounting 
in  the  aggregate  to  $3,000,000,  and  to  extend  tlie  time  for  payment 
thereof  one  year,  under  the  conditions  of  tiie  ea:tension  contract,  and 
Blair  &  Company  further  agreed  to  consmt,  and  did  consent,  to  the 
issuance  of  an  additional  $8,000,000  of  notes  under  said  mortgage,  so 
that  tiie  total  amount  of  said  notes  outstanding  at  any  one  time  should 
not  exceed  $5,000,000,  said  notes  to  be  secured  by  and  to  be  subject  to 
the  terms  of  and  to  have  all  the  benefits  of  said  mortgage,  and  to 
be  in  the  form  prescribed  therein,  except  that  they  ^oiild  bear 
interest  at'  (he  rate  of  6  per  cent  per  annum,  and  should  be  dated 
July  1, 1919,  and  should  be  due  one  year  after  the  date  thereof.  And 
in  said  agreement  with  Blair  &  Company  it  was  provided  that  the 
mortgage  securing  the  said  notes  as  aforesaid  should  continue  and 
remain  a  lien  securing  the  payment  of  the  principal  and  interest  of 
all  of  said  notes,  and  the  principal  amount  at  any  one  time  outstand- 
ing to  be  limited  to  the  principal  amount  of  $6,000,000  and  the  lien 
in  priority  of  the  mortgage  as  security  of  said  notes,  and  all  the  con- 
ditions and  provisions  thereof  and  all  the  rights  and  powers  of  the 
trustee  thereunder,  and  of  any  holder  or  holders  of  said  notes  under 
the  same,  in  case  of  any  default  by  the  maker  thereof  in  the  payment 
of  the  principal  and  interest  on  the  notes,  or  in  any  other  case,  should 
continue  and  remain  unimpaired  and  unchanged,  except  as  to  the  time 
of  payment  of  principal  and  rate  of  interest,  as  provided  in  said 
agreement,  and  it  was  further  provided  that  in  the  event  said  agree- 
ment or  the  certificate  of  extension  annexed  to  said  notes  in  accord- 
ance therewith  being  considered  or  being  held  to  in  any  way  impair 
or  prejudice  the  rights,  securities,  or  privileges  of  said  mortgage  or 

fusLca 


D,=;,lz...,C00gIC 


80  I1TTEBSTA.TE  (TOMMKBOE  OOMIOSSIOIT  BEFOBTS. 

said  notes,  the  agreement  and  the  certific&tea  of  eztennon  and  conp<»i 
sheets  which  should  have  been  attached  to  aaid  notes  should,  at  the 
election  of  the  note  bolder,  be  and  become  null  and  void  and  of  no 
force  and  effect  And  in  said  agreement  with  Blair  &  Company,  the 
railway  covenanted  and  agreed  that  the  said  notes  should  constitute, 
and  would  as  extended  or  issued,  constitute  valid,  legal,  and  binding 
negotiable  obligations  for  the  payment  of  which  die  railway  is  liable. 
And  that  the  mortgage  securing  the  same  constitutes  and  shonld 
continue  to  constitute  a  valid,  binding,  existing,  and  subsisting  lien, 
as  by  said  mortgage  provided. 

The  Commission  Is  of  the  opinion  that  the  $2^000,000  of  said  notes, 
extended  as  proposed  by  applicant,  will  not  of  themselves  constitute 
the  reasonable  protection  to  the  United  States  required  by  section 
210  of  Uie  transportation  act,  1920,  as  amended,  by  secti(Hi  5  of  the 
.  sundry  civil  appropriations  act  of  June  5,  1920,  but  tiiat  if  the  out- 
standing amount  of  said  notes  is  raised  to  $5,000,000,  as  provided  in 
the  agreement  with  Blair  &  Company,  and  the  entire  amount  of 
$6,000,000  is  properly  extended  and  secured  under  the  mortgage  of 
July  1,  1909,  the  deposit  of  aaid  $9,000,000  of  notes,  properly  ex- 
tended, as  collateral  for  the  notes  of  the  railway  be  given  for  the 
loan  of  $2,000,000  proposed  in  the  supplemental  application,  will 
afford  sufficient  security.  This  security  and  the  doing  of  all  things 
necessary  to  effect  the  same  are  offered  by  the  applicant,  -and  the 
applicant  has  made  a  satisfactory  showing  of  its  prospective  eun- 
ing  power.  And  the  Commission  accordingly  finds  that  the  pnwpec- 
tive  earning  power  of  the  applicant  and  the  character  and  value  of 
the  security  offered  are  such  as  to  furnish  reasonable  assurance  of 
the  applicant's  ability  to  repay  the  loan  within  the  time  fixed  there- 
for and  to  meet  its  other  obligations  in  connection  with  such  loan. 

And,  pursuant  to  said  findings,  the  Commission  makes  the  following 
certificate  to  the  Secretary  of  the  Treasury. 


Oertificatg  No.  ^fora  Loan  under  Section  210  of  the  TranaporioMon 
Act,  J9S0,  at  Amended. 

The  Interstate  Commerce  Commission  certifies  to  the  Secretary  of 
the  Treasury  its  findings  of  fact: 

(a)  That  the  making  of  a  loan  to  the  extent  of  $2,000,000  by  the 
United  States  to  the  Carolina,  Clinchfield  &  Ohio  Railway  is  neces- 
sary to  enable  the  said  Carolina,  Clinchfield  &  Ohio  Railway,  herein- 
after referred  to  as  the  applicant,  properly  to  meet  the  transportation 
needs  of  the  public. 

(6)  That  the  prospective  earning  power  of  the  applicant,  and  the 
character  and  value  of  the  security  offered,  are  such  as  to  furnish 

eoto-a 


LOAN   TO  OABOUKA,  aUNOHFIHLD  A  OHIO  BT.  31 

reasonable  aiBuruice  of  the  applicant's  ability  to  r^ay  the  loan 
within  the  time  fixed  thOTefor,  and  to  meet  its  other  obligations  in  con- 
nection with  such  loan. 

And  the  Interstate  Commerce  Commission  further  certifies  to  the 
Secretary  of  the  Treasury: 

(c)  That  the  amount  of  the  loan  whieh  is  to  be  made  is  $2,000,000. 

(d)  That  the  time  from  the  making  thereof  within  which  the  loan 
is  to  be  repaid  is  10  years,  with  the  option  to  the  applicant  to  repay 
any  part  of  said  loan  at  any  time  before  maturity. 

(e)  That  the  terms  and  conditions  of  the  loan,  including  the  secur- 
ity  to  be  given  for  repayment,  are  as  follows ;  (1)  The  outstanding 
10-year  S  per  cent  mortgage  gold  notes  secured  by  mortgage  dated 
July  1,  1909,  of  the  Carolina,  CUnchfield  &  Ohio  Railway  to  the 
Equitable  Trust  Company  of  New  York,  trustee,  and  extended  hy 
agreement  of  June  80, 1919,  between  the  Carolina,  Clinchfield  &  Ohio 
Bailway  and  Blair  &  Company,  and  the  note  holders,  for  one  year, 
with  interest  at  6  per  cent,  shall  be  increased  to  the  full  amount  origi- 
nally authorized  by  said  mortgage  of  July  1, 1909,  and  by  said  agree- 
ment of  June  30, 1919,  with  Blair  &  Company  and  the  note  holders, 
to  wit,  iSfiOQjOOO,  and  the  applicant  shall  make,  and  secure  the  making 
of,  all  contracts  and  the  recording  of  same,  and  the  doing  of  all  things 
necessary,  in  the  opinion  of  the  Interstate  Commerce  Commission, 
to  validly  increase  the  outstanding  issue  of  said  notes  to  the  full 
amount  of  $5,000,000,  to  extend  the  said  notes  until  July  1, 1930,  with 
interest  at  6  per  cent  per  annum,  to  preserve  for  the  benefit  of  the 
holders  of  said  notes  as  extended  the  full  lien  of  the  mortgage  dated 
July  1,  1909,  from  the  Carolina,  Clinchfield  &  Ohio  Railway  to  the 
Equitable  Trust  Company  of  New  York,  trustee,  to  secure  the  10- 
year  6  per  cent  mortgage  gold  notes  of  a  total  authorized  issue  of 
$5,000,000,  to  make  proper  record  thereof,  and  to  give  proper  notice 
thereof  to  all  concerned.  (2)  Said  $6,000,000  of  notes  to  be  properly 
extended  to  July  1, 1930,  at  6  per  cent,  and  secured  hy  the  lien  of  the 
said  mortgage  of  July  1, 1909,  from  the  Carolina,  Clinchfield  &  Ohio 
Railway  to  the  Equitable  Trust  Company  of  New  York,  trustee,  are 
to  be  deposited  with  the  Secretary  of  the  Treasury  as  collateral  secur- 
ity for  obligations  in  the  aggregate  principal  amount  of  $2,000,000 
to  be  entered  into  by  the  applicant  in  such  form  as  may  be  prescribed 
by  the  Secretary  of  the  Treasury,  and  the  loan  to  the  applicant  shall 
bear  interest  at  the  rate  of  6  per  oent  per  annum,  payable  semi- 
annually to  the  Secretary  of  the  Treasury.  (3)  The  loan  shall  not 
be  made  to  the  applicant  until  applicant  shall  have  furniBhed,  in 
form  satisfactory  to  the  Interstate  Commwce  Commission,  evidence 
of  its  effective  undertaking  to  finance  and  meet — 

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82  niTBBSTAIB  OOtnCBBCB  OOUCKSIOir  BEFOBTB. 

Blkhom  exteosloD  flnt-mortgRKO  ^  P«r  cent  notes,  tbe  paymeat  of 
whlcb  waa  extended  until  Januair  !■  1922,  on  condition,  as  stated 
In  the  application,  tbat  applicant  place  them  with  another  holder 

not  later  than  July  1. 1920 Jl,800,000 

Short-time  notes  and  acceptances  In  the  anionnt  of 4,124,000 

ESqaipment-trnst  obllgatlona  maturing  In  the  years  1920  and  1921, 
and  interest  on  equlpment-tmst  obligations  during  these  years, 

amounting  In  the  aggregate  to 2,O87W0 

Other  obligations  now  dne  or  maturing  In  the  years  1920  and  1921, 
amounting  in  the  aggregate,  with  the  obllmitione  In  this  paragraph 

previously  meDtloned,  to  more  than $7,000^000 

b;  the  issue  and  sale  to  its  shareholders  or  others  of  its  income  de- 
bentures in  an  amoimt  not  less  than  $6,000,000  (out  of  an  authorized 
issue  of  $6,000,000),  bearing  not  more  than  6  per  cent  interest  per 
annum,  and  sold  at  not  less  than  par,  the  undertaking  of  the  appli- 
cant in  this  regard  to  be  underwritten  by  Blair  &  Company,  Incor- 
I>orated,  which  Blair  &  Company,  Incorporated,  shall  undertake 
to  dispose  of  or  purchase  said  debentures  at  par,  and  at  not  exceed- 
ing 6  per  cent  interest  per  annum,  and  without  other  cost  to  the  appli- 
cant, as  floating  indebtedness  and  other  obligations  shall  mature  or 
become  due.  Proceeds  of  said  $6,000,000  of  debentures  are  not  to  be 
used  for  or  applied  to  any  other  purpose  than  the  payment  of  the 
aforesaid  obligations  due  or  maturing  In  the  years  1920  and  1921. 
It  is  understood  and  agreed  tbat  said  $1,800,000  of  Elkhom  extension 
first-mortgage  6  per  cent  notes  may  be  paid  and  placed  in  the  treas- 
ury of  applicant  and  when  bo  paid  and  retired  may  be  reissued  in 
accordance  with  law,  with  distinct  notice  of  and  in  subordination 
to  the  lien  of  the  full  $6,000,000  of  10-year  6  per  cent  mortgage  gold 
notes  to  be  deposited  by  the  applicant  as  security  for  the  loan  applied 
for,  notice  to  this  effect  to  be  indorsed  on  the  notes  before  their 
reissue.  (4)  The  applicant  to  undertake  and  agree  that,  with  the 
exception  of  the  obligations  now  due  or  maturing  in  the  years  1930 
and  1921  above  prorided  for,  no  payments  of  any  funded  debt  now 
existing  or  hereafter  created  shall  he  made  by  it  until  the  present 
loan  is  repaid  in  full  and  all  obligations  in  connection  therewith  are 
fulfilled,  except  that  maturing  car-trust  obligations  may  be  met  out 
of  net  earnings  or  by  the  issue  of  obligations  maturing  after  July  1, 
1931,  and  except  that  $6,000,000  of  ElUiom  extansion  first-mortgage 
6  per  cent  bonds  may  be  met  out  of  net  earnings  or  refunded  by  obli- 
gations maturing  after  July  1,  19S1.  The  undertaking  and  condi- 
tion provided  in  this  paragraph  to  be  eridenced  by  such  contract  or 
contracts  entered  into  by  applicant,  either  as  part  of  a  collateral-tmst 
agreement  or  separately,  as  may,  in  the  opinion  of  the  Interstate 
Commerce  Commission,  be  sufficient  (6)  The  term  of  the  above- 
mentioned  debentures  to  be  not  lees  than  15  years,  and  it  to  be 

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LOAir  TO  OASOUNA,  CLINOHFIEU)  A  OHIO  BT.  98 

distliMtfy  prorided  that  do  p«rt  of  ths  principal  of  said  debentareB 
shall  be  paid  until  the  loan  made  by  the  United  States  ie  repaid  in 
full  and  all  obligations  in  connection  therewith  are  fulfilled,  and  no 
part  of  the  interest  on  said  debentures  is  to  be  repaid  while  as;  in- 
terest due  on  the  loan  from  the  United  States  remains  unpaid,  pro- 
vided, however,  that  such  debentures  may  be  retired  or  converted 
by  the  issue  of  applicant's  capital  stock. 

if)  That  the  prospectire  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered  and  required, 
fonuah,  in  the  opinion  of  the  Commission,  reasonable  assurance  of 
the  applicant's  ability  to  repay  tiie  loan  within  the  time  fixed  there- 
for, and  reasonable  protection  to  the  United  States,  and 

{g)  That  the  applicant,  in  the  opinion  of  the  Commission,  is  un- 
able to  provide  itself  from  other  sources  with  the  funds  necessary  for 
the  aforesaid  pnrpoaee. 

Done  at  Washington,  D.  C,  this  26th  day  of  June,  1920. 


Supplement  to  Certificate  No.  4  for  a  Loan  under  Section  HO  of  the 
Transportation  Act,  1920,  as  Amended. 

To  THE  Secretary  of  the  TVieasdbt: 

Referring  to  its  original  certificate  No.  4  herein  of  June  06,  1920, 
and  supplementing  said  certificate,  the  Interstate  Commerce  Com- 
mission now  further  certifies  as  follows : 

1.  That  the  applicant  has  increased  to  the  full  amount  originally 
authorized  by  its  mortgage  of  July  1,  1909,  to  the  Ek^uitable  Trust 
Company  of  New  York,  trustee,  its  10-year  5  per  cent  mortgage 
gold  notes  secured  by  said  mortgage,  so  that  there  is  now  outstanding 
$5,000,000  principal  amount  of  said  notes. 

2.  That  the  applicant  has  made  and  secured  the  making  of  all  con- 
tracts and  the  recording  of  same,  and  the  doing  of  all  things  neces- 
sary, in  the  opinion  of  the  Interstate  Commerce  Commission,  to 
validly  increase  the  outstanding  issue  of  said  notes  to  the  full  amount 
of  $5,000,000,  to  extend  the  said  notes  until  July  1,  1930,  with  inter- 
est at  6  per  cent  per  annum,  to  preserve  for  the  benefit  of  the  holders 
of  said  notes  as  extended  the  full  lien  of  the  mortgage  dated  July 
1,  1909,  from  the  Carolina,  Clinchfield  A  Ohio  Railway  to  the 
Equitable  Trust  Company  of  New  York,  trustee,  to  secure  the  10- 
year  5  per  cent  mortgage  gold  notes  of  a  total  authorized  issue  of 
$5,000,000,  to  make  proper  record  thereof,  and  to  give  proper  notice 
thereof  to  all  concerned. 

8.  That  it  will  be  satisfactory  to  the  Interstate  Commerce  Commis- 
sion to  accept  $5,000,000  of  10-year  5  per  cent  mortgage  gold  notes 
65I.C.C. 

«844°— 22— Vol  65 3  ,^  , 


B4  IKTERffFATE  COMSEOOE  COMMIBeiON  BEP0BT8. 

to  be  deposited  by'tbe  applicant  as  security  for  its  10-year  note  to 
the  United  States  of  America  in  the  following  form : 

(a)  Two  million  dollars  principal  amount  of  said  notes  in  dilu- 
tive form  in  denominations  of  $1,000  each,  with  certificates  of  exten- 
sion to  July  1,  1920,  attached. 

(b)  Three  million  dollars  principal  amount  of  said  notes  in  the 
form  of  one  temporary  note  exchangeable  for  notes  in  definitive 
form  of  denominations  of  $1,000  eadi,  when  the  same  can  he  pre- 
pared, which  temporary  note  shall  be  dated  July  1,  ldl9,  and  due 
July  1,  1920,  and  ^all  bear  interest  at  the  rate  of  6  per  cent  per 
annum,  and  that  it  will  be  also  satisfactory  to  the  Interstate  Com- 
merce Commission  for  the  purpose  of  extending  ai\  of  the  said  notos 
to  July  1, 1930,  with  interest  at  the  rate  of  6  per  cent  per  fumam ;  that 
the  Secretary  of  the  Treasury  hereafter  present  the  same,  or  cause 
the  same  to  be  presented  to  the  Equitable  Trust  Company  of  New 
York,  trustee,  under  said  mortgage,  to  have  affixed  thereto  further 
certificates  of  extension  evidencing  the  extension  to  July  1,  1930; 
and  that  it  will  also  be  satisfactory  to  the  Interstate  Commerce  Com- 
mission to  exchange  the  said  $3,000,000  temporary  note  for  notes  in 
definitive  form  when  the  same  shall  be  ready  for  delivery. 

4.  llie  applicant  has  furnished  in  form  satisfactory  to  the  Interstate 
Commerce  Commisuon  evidence  of  its  effective  undertaking  to  finance 
and  meet  the  several  obligations  set  forth  in  subdivision  numbered  (3) 
of  the  said  original  certificate  No.  4  by  the  issue  and  sole  to  its  share- 
holders or  others  of  its  income  debentures  in  amount  not  less  than 
$5,000,000  (out  of  an  authorized  issue  of  $6,000,000)  bearing  interest 
at  6  per  cent  per  annum  and  to  be  sold  at  not  less  than  par,  the  under- 
taking of  the  applicant  in  this  regard  having  been  underwritten  by 
Blair  &  Company,  Incorporated,  which  Blair  &  Company,  Incor- 
porated, have  undertaken  to  diqiose  of  or  purchase  said  debentures 
at  par,  and  at  not  exceeding  6  per  cent  per  annum  interest,  and  with- 
out further  cost  to  the  applicant  as  fioating  indebtedness  and  other 
obligations  of  the  applicant  shall  mature  or  become  due.  The  term 
of  the  above-mentioned  debentures  being  15  years  and  it  being  dis- 
tinctly provided  that  no  part  of  the  principal  of  said  debentures 
shall  be  paid  until  the  loan  made  by  the  United  States  is  repaid 
in  full  and  all  obligations  in  connection  therewith  are  fulfilled,  and 
that  no  part  of  the  interest  on  said  debentures  is  to  be  paid  while  any 
interest  due  on  the  loan  from  the  United  States  remains  unpaid,  but 
the  applicant  shall  have  the  privilege  of  retiring  said  debentures  or 
converting  them  by  an  issue  of  the  applicant's  capital  stock. 

5.  The  applicant  has  undertaken  and  agreed,  in  a  form  satisfac- 
tory to  the  Interstate  Commerce  Commission,  that  the  proceeds  of 
said  $5,000,000  of  debentures  are  not  to  be  used  for  or  applied  to  any 


^dhvCooc^lc 


LOAK  TO  CABOLTOA,  CUNCHFIEUt  A  OHIO  BT.  85 

other  purpose  than  the  payment  of  the  aforesaid  obligations  of  the 
applicant  due  or  maturing  in  the  years  1920  and  1921,  and  that  if 
the  applicant  shall  reissue  the  total  or  any  part  of  said  $1^00,000 
of  Elkhom  extension  first-mortgage  5  per  cent  notes  said  reissue 
will  be  with  distinct  notice  of  and  in  subordination  to  the  lien  of 
the  full  $5,000,000  of  10-year  5  per  cent  mortgage  gold  notee  depos- 
ited by  the  applicant  as  security  for  the  loan  applied  for,  and  that 
notice  to  this  f^ect  will  be  indorsed  on  the  notes  before  their  reissue. 

6.  The  applicant  has  further  undertaken  and  agreed  in  a  form 
satisfactory  to  the  Interstate  Commerce  Commission  that,  with  the 
exception  of  the  obligations  now  due  or  maturing  in  the  years  1920 
and  1921  above  provided  for,  no  payment  of  any  funded  debt  now 
existing  or  hereafter  created  shall  be  made  by  it  until  the  present 
loan  is  repaid  in  full  and  all  obligations  in  connection  therewith  are 
fulfilled,  except  that  maturing  car-trust  obligations  may  be  met  out 
of  net  earnings  or  by  the  issue  of  obligations  maturing  after  July  1, 
1921,  and  except  that  $6,000,000  of  Elkhom  extension  fitst-mortgage 
5  per  cent  bonds  may  be  met  out  of  net  earnings  or  refunded  by 
obligations  maturing  after  July  1, 1921. 

Done  at  Washington,  D.  C,  this  1st  day  of  July,  1920. 
66 1.0.  a 


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IKTEBSTATE  COUUEBGE  COMMISSION  BEFOSTS. 


Finance  Dockett  No.  3. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  KANSAS 
CITY,  MEXICO  &  ORIENT  RAILROAD  COMPANY,  ITS 
RECEIVER,  AND  THE  KANSAS  CITY,  MEXICO  &  ORI- 
ENT RAILWAY  COMPANY  OF  TEXAS,  FOR  A  LOAN. 


BubnUtted  June  a,  ISZO.    Decided  July  1.  1920. 


1.  B7  section  210  of  tbe  traaBportatlon  act,  1920,  as  amended,  two  findings  aie 

neceasaiT  prereqalsttes  to  a  recommendatloD  that  a  loan  be  made,  to  wit: 
(a)  A  finding  tliat  the  making,  in  whole  or  In  part,  of  the  proposed  loan 
by  tbe  United  States  ts  neceasary  to  enable  the  applicant  properly  to 
naeet  tbe  transportation  needs  of  the  public,  and  (b)  a  finding  that  tbe 
prospective  earning  power  of  the  applicant  and  tbe  character  and  value 
of  the  securltj  ofCered  are  auch  as  to  fnmlab  reasonable  assurance  of  tbe 
applicant's  ability  to  repay  the  loan  wltbin  the  time  fixed  therefor,  end 
to  meet  its  other  obligations  In  connection  with  such  loan. 

2.  Tbe  Commission  Is  unable  upon  the  record  to  make  either  of  these  findings. 

Application  denied. 

W.  L,  Aldwell,  S.  P.  AlUaon,  Alexander  CoUins,  F.  M.  Conner, 
A.  DeBemardi,  E.  F.  EdU^  Clifford  Histed,  G.  W.  Gates,  John  F. 
Robinson,  W,  P.  Rooney,  George  B.  Sheppard,  and  R,  Theis  for 
applicants. 

James  Cornell  for  Texas  towns  and  patrons,  and  the  Del  Rio 
extension;  Elam,  Dudley  for  Barnhart,  Irion  county,  and  Ozona, 
Crockett  county,  Tex.;  W.  E,  Eolmea  for  Wichita  Board  of  Com- 
merce; S.  E.  McKnight  for  Sonora,  Sutton  county,  Tex.;  G.  W. 
WaltkaU  for  Crowell  Commercial  Club;  and  O.  W.  WiUiamt  for 
citizens  of  Pecos  county,  Tex. 

Report  of  tbe  CoHuisaioN. 
Division  4,  Comhissionebs  Metbb,  Danibu,  and  Eastman. 
By  Division  4: 

The  Kansas  City,  Mexico  &  Orient  Railroad  Company,  and  Wil- 
liam T.  Kemper,  its  receiver,  and  the  Kansas  City,  Mexico  &  Orient 
Railway  Company  of  Texas  jointly  applied  on  May  17,  1920,  for  a 
loan  to  them  from  the  United  States  in  the  amount  of  $2,500,000, 
claimed  to  be  necessary  to  enable  them  properly  to  serve  the  public 
during  the  transition  period  immediately  following  the  termination 
of  federal  control,  as  provided  in  section  210  of  the  transportation 

69 1. 0. 0. 


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LOAir  TO   KANSAS  OTTY,  UBXICO  A  OBtEKT  R.  B.  37 

act,  1920.  These  two  companies  together  own  a  line  of  railroad, 
hereinafter  called  the  Orient,  extending  from  Wichita,  E^ans.,  to 
Alpine,  Tix.  Ultimately,  if  present  plans  are  carried  out,  it  will 
form  part  of  a  transcontinental  line  from  Kansas  City,  Mo.,  to 
Topolobampo,  Mexico,  on  the  Gulf  of  California.  A  part  of  the  line 
in  Mexico  has  already  been  constructed  by  an  affiliated  corporation. 
The  loan  vas  asked  for  a  period  of  Eve  years.  The  indicated  uses 
to  which  it  would  be  applied  were  to  pay  and  discharge  outstanding 
receiver's  certificates  in  the  amount  of  $1,420,000  and  to  enable  the 
companies  to  meet  tlieir  fixed  charges  and  operating  expenses  after 
September  1,  19B0,  and  until  expected  increased  rates  are  reflected 
in  th^r  earnings  and  they  regain  bunness  alleged  to  have  been 
diverted  from  them  dnring  the  period  of  federal  control.  It  was 
stated  in  this  original  application  that  no  portion  of  the  requested 
loan  would  be  used  for  additions  and  betterments.  As  security  for 
the  loan,  applicants  offer  to  give  receiver's  certificates  of  the  Kansas 
City,  Mexico  &  Orient  Bailroad  Company  to  be  duly  authorized  by 
the  United  States  district  court  having  jurisdiction  of  the  case,  and 
bearing  the  indorsement,  if  desired,  of  the  Kansas  City,  Mexico  % 
Orient  Railway  Company  of  Texas.  It  was  promised  that  informa- 
tion in  regard  to  the  security  would  later  be  supplied  in  detail,  but 
this  has  not  been  done. 

In  response  to  our  requirement  that  applicants  state  accurately 
and  in  detail  the  transportation  needs  which  they  would  be  unable 
to  meet  and  the  service  for  the  public  which  they  could  not  perform 
if  the  requested  loan  were  not  granted,  they  indicate  that  it  might  bo 
neceesary  to  discontinue  service  if  the  application  were  denied. 
While  a  anall  portion  of  the  mileage  in  Kansas  and  Oklahoma  is 
paralleled  by  other  lines,  they  point  out  that  in  Texas  the  Orient 
toaversee  a  large  otherwise  unoccupied  territory,  all  of  which  is 
devoted  to  diversified  fanning  and  cattle  raising,  including  the  rais- 
ing of  grain  of  all  kinds,  broom  com,  alfalfa,  cotton,  kaffir,  cattle, 
horses,  sheep,  goats,  etc. ;  that  there  are  109  towns  and  villages,  a 
number  of  which  are  county  seate,  located  along  the  line,  83  of  which 
it  serves  exclusively;  and  that,  in  addition,  approximately  25  inland 
towns  are  dependent  upon  ^e  Orient  for  their  transportation.  Then 
followed,  in  the  original  application,  this  statement: 

It  Witt  be  impoaslble  for  these  rallroade  to  conttnoe  In  operatiOD  after  Sep- 
tember 1st  unlttB  this  reqDesled  loan  Is  graDtcd.  (Further  detail  will  im 
anppUed  In  subsefueot  sUtunent) 

The  same  statement,  with  the  exception  of  the  parenUietical  prom- 
ise to  supply  further  detail,  appears  in  the  amended  and  supple- 
mental application ;  but  no  information  has  been  furnished,  either  in 

68I.C.C. 


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88  INTEBSTAIB  OOUMIBOB  OOUldlSSIOir  BKPOBT8. 

the  applications  or  at  the  heuing,  u  to  tlie  reasons  which  will  ma^ 
it  impossible  for  the  Orient  to  continue  in  operation  after  S^tatnber 
1, 1920,  if  the  requested  loan  is  not  granted. 

By  tJieir  amended  and  supplemental  application  filed  at  the  hear- 
ing on  June  8,  1920,  the  companies  and  the  receiver  increase  the 
amount  requested  from  $2,500,000  to  $8,500,000  and  stated  the  pur- 
poses and  proposed  uses  of  the  loan  and  the  goveming  considerations 
as  follows: 

(a)  The  purposes  of  the  loan  and  the  uses  to  which  it  is  to  be  ap- 
plied are  as  follows:  (1)  To  pay  and  discharge  outstanding  receiver's 
certificates  in  the  principal  amount  of  $1,420,000  due  December  1, 
1920,  for  the  purpose  of  clearing  title  to  the  property ;  (2)  to  provide 
a  working  capital  to  meet  fixed  charges  and  operating  expenses  after 
Septembn*  1,  1920,  before  the  expected  increased  frei^t  rates  will 
be  reflected  in  earnings  and  during  the  period  in  which  the  cmn- 
panies  will  undoubtedly  sustain  a  deficit  while  they  are  regaining 
their  business  diverted  from  them  during  the  period  of  federal  con- 
trol; also  to  provide  for  certain  additions  and  betterments  stated 
in  paragraph  (c)  hereafter ;  (S)  the  remainder  of  the  loan, 
$1,000,000,  is  to  be  used  in  completing  the  laying  of  the  track  upon 
the  completed  grade  from  Del  Kio  Junction,  about  8  miles  south  of 
San  Angelo,  Tex.,  to  Sonora,  Tex.,  a  distance  of  about  61  miles,  and 
thereby  aford  an  outlet  to  a  large  and  rapidly  growing  food  and 
stock  raising  section  of  Texas,  the  completion  of  whit^  line,  without 
further  delay,  is  of  vital  importance  to  the  public  inters. 

(b)  The  considerations  which  govern  the  applicants  in  determin- 
ing the  amount  and  terms  of  the  loan  desired  are  the  necessity  of 
meeting  the  the  receiver's  certificates  outstanding  and  providing  for 
the  inevitable  d^cit  in  fixed  chai^^  and  operating  expenses  after 
September  1,  until  the  companies  can  get  back  their  business  lost 
during  federal  control,  and  once  more  regain  a  self-supporting  status. 
It  is  confidently  believed  that  with  the  aid  of  this  money  the  railroads 
can  be  oontimwd  in  operation  until  such  time  as  a  favorable  show- 
ing can  be  made,  when  they  can  be  financed  under  a  proper  plan  that 
will  attract  private  capital  The  Orient  railroad  system  at  this  time 
in  operation  in  the  United  Stipes  is  an  uncompleted  project,  it  being 
contemplated  that  it  will  ultimately  extend  fttmi  Kansas  City  to  the 
Pacific  const  at  Topolobampo,  a  distance  of  1,659  miles.  Of  this,  787 
miles  arc  completed  uid  in  operation  in  the  United  States  and  236.68 
miles  arc  completed  and  in  operation  in  Mexico.  The  completion 
of  the  line  to  Sonora,  above  outlined,  is  of  great  public  interest  in 

65 1.  C.  G. 


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hOJJS  TO  KAK8A8  CITT,  UKXIOO  A  ORIENT  B.  ft.  89 

affording  an  outlet  to  a  ]arge  and  rapidly  growing  food  and  stock 
raiBing  section  of  Texas  which  is  now  without  railroad  facilities. 

(c)  Out  of  the  fund  mentioned  in  (a)  (2)  hereof  the  companies 
will  spend,  within  the  nezt  two  years,  $170,000  for  the  following  ad- 
ditions and  betterments,  with  the  estimated  cost  thereof: 

ReUi7  five  miles  ct  rat] $8, 000 

AddlHonal  yard  tracks  and  sldttifB 25,000 

Station  and  aUtlon  laciUties 25.000 

New  fuel  station 5,000 

Improvementa  to  l<xx>motl\'eB 10,000 

Freight  cars 47,000 

Machinerr.  shop  tools,  etc 20,000 

Water-softening  plants 10, 000 

Baok  widening  and  ballast 25,000 

Total 170,000 

This  will  be  required  to  farnish  adequate  facilities  and  to  keep  the 
property  from  deterioration  and  from  becoming  obsolete. 

The  purposes  and  uses  of  the  loon  stated  in  the  amended  and  sup-' 
plemental  application  are  substantially  the  same  as  those  set  forth  in' 
the  original  application,  except  for  the  inclusion  of  ?1,000,000  to  be 
used  for  the  completion  of  the  Sonora  branch,  which  represents  the 
increase  of  the  second  request  over  the  first,  and  the  provision  of  the 
relatively  small  amount  of  $170,000  for  certain  additions  and  better- 
ments. As  to  the  greater  part  of  the  loan,  the  two  applications  agree 
in  showing  the  following  purposes  and  uses;  (1)  To  pay  and  dis- 
charge outstanding  receiver's  certificates  for  the  purpose  of  clearing 
title  to  the  property,  about  $1,500,000,  and  (2)  to  meet  fixed  chaises 
and  operating  expenses  aftw  September  1,  1920,  about  $1,000,000. 

The  considerations  indicated  as  governing  the  applicants  in  deter- 
mining the  amount  and  terms  of  the  loan  desired  are  alite  in  both 
cases,  except  that  in  the  amended  and  supplemental  application  the 
necessity  for  the  Sonora  extension  is  mentioned  and  the  alleged  loss 
or  diversion  of  businees  during  federal  control  is  emphasized.  No 
proof  was  submitted  either  with  the  applications  or  at  the  hearing  to 
support  the  allegation  of  loss  or  diversion  of  business,  and  it  is  not 
borne  out  by  the  traffic  statistics  of  the  companies,  which  f<»-  the 
period  from  July  7,  1914,  to  December  31,  1919,  show  the  following 
results  for  revenue  freight : 

esLca 


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INXEBSTATE  OOICUBROE  COMMISSION  HEP0&T3. 


RaportfOr- 

"SS" 

Frtm 

TOUL 

Too-mitef*. 

BvraniM. 

bMU  OVr,  JbUeo  *  Orkut  S.  S. 

II 

■Si 

414,347 

Tent. 

Is 

TWnllu. 

t«,lll,S13 

M,883,S41 
80  474  023 

101433  611 
B^713  4B 

10^M4.0CIQ 

ill 

li,«ie.«is 

X6ntu  CUf.  Mala  &  Ortmt  Rf.  ef 

,».,„ 

I,0ST,3T0 

1,(BT,9U 

>  iDdndad  In  Kumi  Cltr,  Utxieo  &  Orlsnt  repot. 

Great  interest  in  these  applications  was  manifested  by  the  com- 
munities served  by  the  Orient  lines.  This  interest  was  evidently 
the  result  of  a  widespread  fear  that  if  the  loan  should  not  be  granted 
operation  of  the  Orient  might  be  abandoned.  It  is  not  disputed 
that  the  Orient  system,  or  at  least  that  part  which  lies  within 
the  United  States,  is  of  essential  importance  in  meeting  the  trans- 
portation needs  of  the  public  in  the  territory  which  it  serves.  As 
the  law  now  stands,  it  could  not  be  abandoned  without  our  approval. 
Failure  to  discharge  outstanding  receiver's  certificates  and  thus 
"  clear  title  to  the  property  "  might  result  in  a  receiver's  sale,  but 
such  a  sale  might  well  prove  of  benefit  to  the  operation  of  the  prop- 
erty by  scaling  down  the  present  top-heavy  capitalization. 

Applicants  apparently  misconceive  the  purposes  of  the  revolv- 
ing fund  created  by  section  210  of  the  transportation  act,  1020,  and 
fail  to  appreciate  the  requirements  of  the  section  as  to  the  admin- 
istntion  of  the  fund.  With  the  exception  of  the  provision  for  the 
Sonora  branch  and  the  comparatively  small  allowance  for  addi- 
tions and  betterments,  included  in  the  supplemental  but  not  in  the 
original  application,  the  companies  have  clearly  had  in  mind  private 
advantage  rather  than  "  the  transportation  needs  of  the  public." 
The  operating  representative  of  the  Orient  stated  that  737  miles  of 
road  are  in  operation;  that  the  road  is  in  good  condition,  is  laid 
with  70-pound  and  75-pound  rail,  and  has  not  had  enough  service  to 
injure  the  rail;  that  the  bridges  are  safe  for  traffic  for  many  years 
to  come;  that  the  equipment  on  road  has  been  only  65  per  cent  of 
the  equipment  owned,  which  is  an  indication  of  ownership  in  excess 
of  use ;  that  the  road  is  well  equipped  with  working  tools,  ditchers, 
steam  shovels,  ballast  cars,  etc. ;  that  it  has  a  modem  locomotive  and 
car  shop  at  Wichita,  Kans.,  that  cost  more  than  $700,000  about  seven 
or  eight  years  ago,  and  could  not  be  reproduced  to-day  for  double 

65i.aa 


LOUT  TO  KAH8AS  OITY,  HXStOO  «  OBIKNT  B.  K.  41 

tbtt  amonnt ;  that  the  shop  is  in  good  workiog  condition  and  was 
utilized  throughout  federal  contrt^  not  only  to  msintBin  the  Orient 
equipment,  but  many  other  engines  of  other  roads;  that  the  terminal 
facilities  along  the  entire  line  are  excellent;  that  the  power  and 
equipment  are  ample  to  handle  twice  as  much  traffic  as  has  been  or 
is  being  bandied ;  end  that,  being  a  good  intennediate  line  of  nearly 
800  miles,  with  no  congested  terminals  and  with  sufficient  power, 
the  Orient  oonld  handle  businees  now  moTing  via  other  routes  and 
"thus  relieve  the  transportation  system  very  mateiially,  and  like- 
wise the  oar  situation."  It  is  evident  from  this  testimony  that  the 
Orient  does  not  require  a  loan  from  the  United  States  to  onable  it 
"  properly  to  meet  the  tranqiortation  needs  of  the  public." 

By  section  5  of  the  sundiy  civil  appropriation  act,  June  5,  1920, 
section  210  of  the  tranqwrtotiou  act,  1920,  was  amended  ao  as  to 
state,  inter  aHa,  the  purposes  for  which  loans  from  the  revolving 
ftmd  may  be  applied  for  and  recommended.  Those  purpoeeB  are 
(1)  to  meet  maturing  ind^tedness,  (2)  to  provide  equipment,  and 
(3)  to  provide  oUier  additions  and  betterments. 

On  June  7,  1920,  after  a  full  hearing,  we  announced  that  loans 
for  additions  and  betterments,  other  than  equipment,  would  not  be 
recommended  except  upon  satisfactory  evidence  Hiat  they  will  relieve 
congestion  and  enable  existing  equipment  to  do  more  work.  We  also 
announced  that  no  louia  for  this  purpose  would  be  recommended 
without  satisfactory  evidence  that  the  government  funds  would  be 
met  by  such  cfmiributions  from  the  carriers  as  it  might  be  within 
their  power  to  furnish.  Opportunity  was  afforded  to  file  new  or 
amended  and  supplemental  applications  in  accordance  with  the  prin- 
ciples announced,  and  it  was  provided  tliat  in  respect  of  auch  addi- 
tions and  betterments  such  further  Replications,  should  particularly 
show  (a)  why  applicant  is  unable  its^f  to  finance  the  project,  (b) 
what  efforts  applicant  has  made  to  do  the  work  without  government 
aidj  (c)  how  and  to  what  estent  the  proposed  additions  and  bet- 
terments will  facilitate  the  miovemeot  of  cars,  (d)  the  plan  and 
details  of  cost  of  the  work  proposed,  and  (e)  the  proportion  of 
total  cost  which  will  be  financed  by  the  applicant. 

The  representative  of  Texas  towns  and  patrons  who  appeared  par- 
ticularly in  behalf  of  the  Del  Rio  extension  stated  very  definitely 
what  the  community  proposed  to  contribute  or  had  offered  to  the 
railroad  company  in  aid  of  this  extension,  to  wit,  the  existing  graded 
right  of  way  and  $275,000  in  cash.  He,  as  well  as  other  spokesmen 
for  communities  along  the  Orient  lines,  expressed  the  willingness  of 
their  people  to  pay  such  increased  rates  as  might  be  necessary  to 
maintain  the  service.  This  spirit  of  cooperation  is  commendable 
and  entirely  in  consonance  with  the  principle  of  eelf-help  which  wa 

65 1,  c.  a 

'.t)OgIc 


42  iBTERSTAtX!  COUUEBCE  OOHlCiaSION  BKP0BI8. 

have  emphasized  as  a  desirable  basis  for  the  admhustration  of  the 

revolving  fund.  No  similar  spirit  has  been  exhibited  by  those 
hnanciallj  interested  in  the  Orient.  The  statement  made  by  appli- 
cants that  the  American  investors  have  apparently  lost  further  in- 
terest in  the  project  and  have  refused  to  advance  further  funds  for 
the  protection  of  the  property  or  of  their  investment  is  not  conducive 
to  favorable  consideration  of  the  application.  And  especially  Is 
this  true  in  respect  of  the  piincipal  requests  for  $1^00,000  to  pay 
and  discharge  receiver's  certificates  for  the  purpose  of  clearing  title 
to  the  property  and  for  $1,000,000  to  meet  fixed  charges  and  operat- 
ing expenses  after  September  1,  1920.  The  Kansas  City,  Mexico  & 
Orient  Railroad  is  now  in  the  hands  Of  a  receiver.  It  is  obvious  that 
clearing  title  by  the  discharge  of  receiver's  certificates  and  the  pay- 
ment of  fixed  charges  would  be  of  great  benefit  to  the  security  hold* 
ers  who  "  have  refused  to  advance  any  further  funds  for  the  protection 
of  the  property  or  their  investment,"  but  it  is  not  apparent  that  the 
failure  to  do  these  things  should  or  would  prevent  the  proper  service 
to  the  public  which  the  roads  are  now  capable  of  giving.  The  vice 
president  and  general  solicitor  of  the  Orient  lines,  who  appeared 
for  the  applicants  at  the  hearing  on  June  8,  1920,  stated  that  with 
a  very  slight  accession  of  business  the  system  could  be  "  put  on  not 
only  a  self-supporting  basis,  but  on  one  that  will  be  gratifying,  in- 
deed." This  statement,  as  w^  as  the  testimony  of  the  operating 
representative  above  referred  to,  goes  to  show  that  the  Orient  does 
not  require,  in  addition  to  advances  under  section  209,  further  aid 
to  meet  the  transportation  needs  of  the  public 

Considering  in  order  the  purposes  for  which  a  loan  may  be  ap- 
plied for  or  recommended  under  the  law,  we  find: 

1.  That  the  loan  can  not  be  recommended  to  meet  maturing  in- 
debtedness; and  that  while  the  discharge  of  the  receiver's  certificates 
now  outstanding  might  serve  to  clear  title  to  the  property  and  thus 
benefit  the  security  holders,  who  are  unwilling  in  any  degree  to  pro- 
tect themselves,  such  action  would  not  enhance  the  transportation 
service  available  to  the  public  and  would  not  fall  within  the  pur- 
poses of  the  act. 

2.  That  the  company  now  owns  more  equipment  than  is  required 
by  the  transportation  needs  which  it  now  serves,  and  more  than  will 
be  required  by  any  increased  traffic  reasonably  to  be  expected  during 
the  transition  period  immediately  following  the  termination  of 
federal  control,  and  that  a  loan  can  not  be  recommended  on  this 
account. 

8.  That  no  necessity  for  a  loan  to  make  other  additions  and  better- 
ments on  the  existing  line  has  been  established ;  and  that  the  need 
for  the  proposed  expenditure  for  the  Del  Bio  extension,  the  extent 

65LC.a 


Digitized  bv  Google 


LOAlT  TO  EAHB&S  OIIT,  UBXtOO  A  OBIHirC  ft.  B.  48 

to  which  this  addition  vould  f  adlitate  the  movement  of  cars,  and  tho 
plan  and  details  of  cost  of  the  work  propoeed  have  not  been  suffi- 
ciently proved  to  enable  a  recommendation  in  this  regard. 

By  section  210  of  the  transportation  act,  1920,  as  amended,  two 
findings  are  necessary  prerequisites  to  a  recommendation  that  a  loan 
be  made:  (a)  A  finding  that  the  making  in  whole  or  in  part  of  the 
proposed  loan  by  the  United  States  is  necessary  to  enable  the  appli- 
cant prtqwrly  to  meet  the  transportation  needs  of  the  public ;  and 
(d)  a  finding  that  the  prospective  earning  power  of  the  applicant 
and  the  character  and  value  of  the  security  offered  are  such  as  to 
furnish  reasonable  assurance  of  the  applicant's  ability  to  repay  the 
loan  and  to  meet  its  other  obligations  in  connection  with  such  loan. 

We  are  unable,  upon  the  evidence  and  arguments  presented,  to 
make  either  of  these  findings. 

The  application  is  accordingly  denied,  and  an  appropriate  order 
will  be  entered.' 

ORDER. 

A  hearing  having  been  held  on  this  application,  and  full  investiga- 
tion  of  the  matters  and  things  invoired  therein  having  been  had, 
and  the  said  Division  having,  on  the  date  hereof,  made  and  filed  a 
report  containing  its  findings  of  fact  and  conclusions  thereon,  which 
said  report  is  hereby  referred  to  and  made  a  part  hereof ; 

It  it  ordered.  That  the  said  application  be,  and  it  is  hereby,  denied. 
65I.C.a 


Digilzed  by  Google 


INIEBSTA'Pe  OOMUe&OE  COMlinSSIOK  BE^MS. 


Finance  Docket  No.  926. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  BAN- 
UOR  &  AROOSTOOK  RAILROAD  COMPANY  FOR  A  LOAN 
FROM  THE  UNITED  STATES  TO  AID  IN  PROVIDING 
EQUIPMENT  AND  OTHER  ADDITIONS  AND  BETTER- 
MENTS. 


Sttbmltled  June  i8,  19i0.     Deoided  July  «,  19t9. 


Application  granted  and  loan  of  fSOOfiOO  approved. 

Percy  R.  ToAd  for  applicant. 

Report  of  the  Comhisbion, 
Division  4,  Commissioners  Meter,  DANiELa,  and  Eastman. 
Bt  DmsioN  4: 

The  Bangor  &  ArooEtook  Railroad  Company,  hereinafter  called 
the  applicant,  a  carrier  by  railroad  subject  to  the  interstate  com- 
merce act,  on  May  25,  1920,  made  application  to  the  Initerstate  Com- 
merce Commission  for  a  loan  from  the  Ueited  States  under  8ecGi<»i 
210  of  the  transportation  act,  1930,  in  order  to  obtain  funds  for 
necessary  additions  and  betterments  to  roadway  and  struotures  and 
for  new  equipment.  On  June  19,  1920,  the  carrier  filed  with  the 
Commission  an  amended  and  supplemental  application,  pursuant  to 
the  Commission's  announcement  of  June  7,  1920,  of  the  general  prin- 
ciples by  which  it  would  be  governed  in  administering  the  funds 
created  by  section  210  of  said  act. 

In  the  application,  as  amended  and  supplemented,  the  carrier 
sets  forth : 

1.  That  the  amount  of  the  loan  desired  is  $200,000. 

2.  That  the  term  for  which  it  is  desired  is  15  years. 

3.  That  the  purposes  of  the  loan  are  as  follows : 

To  pay  one-half  the  cost  of  six  consolIdatlon-tTpe  locomotivea,  at 

$60,000  each  (total.  $360,000) $180,000 

To  purchase  one  air  compressor  aod  mlscellaneona  shop  machinery 10, 000 

To  construct  an  additional  passing  track  at  Masardls,  Me.estimated—        4, 600 

To  construct  a  coal-storage  plant  at  Oahfleld,  Me estimated—        B,  400 

Total 200.  OOO 

4.  That  the  use  to  which  the  loan  will  be  applied  ia  to  assist  the 
applicant  in  financing  the  projects  aforesaid. 

5.  The  present  and  prospective  ability  of  the  applicant  to  repay 
the  loan  and  meet  the  requirements  of  its  obligations  in  that  regard. 

66 1.  C,  C. 


LOAN  TO  BABGOa  A  AXOOSTOOK  B.  B.  45 

6.  That  the  security  offered  is  such  amount  of  applicant's  mortgage 
bonds  as  may  be  found  reasonably  required,  as  foUom: 

CoDsoIIdated  refundinK  mortgage  4  per  cent  bonds f2, 341, 000 

St  John  River  extenalOD  flrst-mottgoge  5  per  cent  bonds 163, 000 

Wasbham  eitenslon  flrst-mortgaca  S  p4r  cent  bondB . 32, 000 

7.  That  the  extent  to  which  the  public  convenience  and  necessity 
will  be  served  is  that  without  the  increased  equipment  applicant  will 
be  absolutely  unable  to  promptly  and  properly  handle  the  heavy 
traffic  in  perishable  freight  which  must  be  moved  expeditiously 
within  a  very  limited  period,  and  tliat  the  other  expenditures  are 
equally  necessary  in  the  handling  of  this  traffic. 

Said  applications  were  accompanied  by  such  facts  and  details  as 
the  Commission  required  with  respect  to  the  physical  situation,  owner- 
ship, capitalization,  indebtedness,  contract  oliligatjone,  operation,  and 
earning  power  of  the  applicant,  tt^tfaer  with  such  other  facts 
relating  to  the  propriety  and  expediency  of  granting  the  loan  applied 
for  and  the  ability  ot  the  aj^licant  to  make  good  the  obligation  as 
the  CoDunisaion  deemed  p^rtoneqt  to  the  inquiry. 

After  investigation,  :th8Coramiasi(Hi  finds  that  the  making  of  the 
loan  of  $200,000  bj  the  United  States,  as  requested,  for  the  purposes 
stated,  is  necessary  in.  order  to  liable  the  api^icimt  properly  to  mert 
public  transportation;  needs ;  Uiat  tdte  prospective  e&nung  power  of 
the  applicant  and  the  character  s«d  value  of  the  security  offered 
afford' reasonable  assurance  of  its  ability  to  repay  the. loan  within 
the  time  fixed  therefor,  and  to  meet  its.other  obligations  in  connection 
with  such  loan,  and  reasonable' protection  to,  the  United  States;  aiid 
that,  the  applicant  is  uaabje  to  provide  itetit  from  othu*  sources  with 
funds  necessary  for  such  purposes,  except  >at  excessive  rat«8  of 
interest. 

An  appropriate  certifioate  will  be  issued. 


Certificate  No,  5  for  a  Loan  under  Section  SIO  of  the  Transportation 
'  Act,  1920,  aa  4WiMi!tfrf. . 

The  Interstate  Commerce  Comdiission  certifies  to  tbe  Secretao^ 
of  the  Treaiuiy  its  findings  of  feotc 

1.  That  the  making  of  a  loan  of  $000,000  by  the  United  States  to 
the  Bangor  &-  ArooMoofa  Bailroad  Company,  hereinafter  referred 
to  as  the  applicant,  for  the  purposes  of  providing  applicant  with 
equipment  aild  othev  additions  and  betterments  is  necessary  to  enable 
the  applicant  properly  t;o,mee4;  tbe  transportation  needs  of  the  public. 

2.  That  the  prospective  eamiag  power  of  the  applicant  and  the 
ohar&cter  and  valne  of  the  security  offered  are  such  as  to  furnish 
reasonable  assurtmoe '  of :  the  ai^lioaot's  ability  to  repay  the  loan 

esLaot 


4b  INTBBSTAXE  OOHHBBCB  CCaOllBSlOJf  SBFOBTS. 

within  the  time  fixed  therefor  and  to  meet  ita  other  obligmtions  in 
connection  with  such  loan. 

3.  That  the  amount  of  tbe  loan  which  is  to  be  made  is  $200,000. 

4.  That  the  time  from  the  making  thereof  within  which  the  loan 
is  to  be  repaid  is  15  yeats,  insta]lm«it8  to  be  paid  as  hereinafter 
indicated. 

5.  That  the  terms  and  conditions  of  the  loan,  including  the  securi^ 
to  be  given  for  repayment,  are  as  follows.  The  loui  is  to  be  divided 
into  two  parts,  to  wit: 

One  Dart  to  pay  BpproxlmaMy  one-half  the  cost  ot  six  consolidation* 

type  iDcomotiTefl  costing  approximately  $60;D00  each,  or  $360,000 tUO,  000 

One  part  to  pay  $20,000  on  account  of  additions  and  bettormeDts,  In- 
eluding  on«  afr  compressor  and  mtscellanooos  ah(q>  machinery  cost- 
tng  approximately  $10,000;  one  coal-storage  plant  at  Oakfleld,  Me., 
costing  aivroxmiately  $6,400;  and  an  additional  passing  track  at 

Masardis,  Me.,  costing  approximately  $4,600 20,000 

The  part  of  the  loan  to  pay  approximately  one-half  of  the  cost  of 
Biz  consolidation-type  locomotives  is  to  be  evidenced  by  applicant's 
15  notes  for  $12,000  each,  payable,  respectivdy,  in  1,  2,  3,  4,  6,  6,  7, 
8,  9, 10,  11,  12, 18, 14,  and  15  years  from  the  making  of  aaid  part  of 
the  loan,  with  interest  at  the  rate  of  6  per  cmt  per  annum,  payable 
semiannually.  These  notes  are  to  be  secured  by  a  second  lien  on  the 
equipment  subordinate  only  to  the  first  lien  on  the  same  equipment 
to  secure  equipment  notes  for  the  balance  of  the  purchase  price  to 
be  sold  or  offered  to  the  public.  The  notes  given  to  the  United 
States  or  equipment  notes  depositftd  as  collateral  security  therefor 
to  be  secured  by  the  same  equipment-tmst  indenture  or  sgreonent  of 
conditional  sale  by  which  the  said  equipment  notes  to  be  sold  or 
offered  to  the  public  are  secured;  title  to  the  locomotive  not  to  pass 
to  applicant,  nor  from  the  trustee  for  the  benefit  of  the  United 
States  untU  the  loan  from  the  United  States  has  been  paid  in  full 
and  applicant  has  fulfilled  all  its  obligations  in  regard  thereto.  This 
part  of  the  loan  from  the  United  States  to  be  further  secured  by  the 
pledge  of  the  following  amounts,  par  value,  of  bonds  now  held  in 
applicant's  treasury:  $30,000  of  Washburn  extension  first-mortgage 
5  per  cent  bonds ;  $165,000  of  St  John  Biver  extension  first-mortgage 
5  per  cent  bonds;  $165,000  of  consolidated  refunding  mortgage  4  per 
cent  bonds;  a  total  of  $360,000  par  value.  Said  b<md8  pledged  as 
collateral  security  are  to  be  released  proportd(mat«ly  as  installments 
are  paid. 

The  part  of  the  loan  to  pay  $20,000  on  account  of  other  additions 
and  betterments  is  to  be  evidenced  by  applicant's  fire  notce  for 
$4,000  each,  payable  r'eq>ed;iTely  in  one,  two,  three,  four,  and  five 
years  from  the  making  of  this  part  of  the  loan,  with  interest  at  the 
rate  of  6  per  cent  per  annum,  pay^e  senuannually.    These  notes 


LOAN  TO  BANOOR  ft  AROOSTOOK  R.  R.  47 

are  to  be  secured  by  the  pledge  as  collateral  security  of  $60,000  par 
value  of  consolidated  refunding  mortgage  4  per  cent  bonds  now  held 
in  applicant's  treasury.  Said  bonds  pledged  as  collateral  security 
are  to  be  released  proportionately  as  installments  are  paid. 

Applicant  shall  have  the  privilege  of  paying  any  or  all  instatl- 
menta  of  any  or  all  parts  of  the  loan,  with  accrued  interest,  at  any 
time  before  maturity. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish,  in  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor  and  reason- 
able protection  to  the  United  States;  and, 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  itself  with,  the  funds  necessary  for  the  aforesaid  pur- 
poses from  other  sources. 

Done  at  Washington,  D.  C,  this  6th  day  of  July,  192a 


d.,  Google 


INTEBSTATE  OOMUEBCE  OOMHISSION  BBSOBTS. 


Finance  Docket  No.  940, 
IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  CHI- 
CAGO, BUBLINGTON  &  QUINCY  RAILROAD  COMPANY 
FOR  A  LOAN  FROM  THE  UNITED  STATES  TO  PROVIDE 
IN  PART  FOR  PURCHASE  OF  NEW  EQUIPMENT. 


Submitted  June  18,  19!0.    Decided  July  9,  1920. 


AppUcatlOD  granted  and  loan  of  ii,4Aefi25  wpmved. 
Hale  Holden  for  applicant. 

Report  or  the  Commission. 
Division  4:  CoHHisstoNERs  Meter,  Daniels,  and  Eastman. 
Bt  Divibion  4: 

The  Chicago,  Burlington  &  Quincy  Railroad  Company,  a  carrier 
by  railroad  subject  to  the  interstate  commerce  act,  on  June  18,  1920, 
made  application  to  the  Interstate  Commerce  Commission  for  a  loan 
from  the  United  States  in  accordance  with  section  210  of  the  trans- 
portation act,  1920,  as  amended,  to  provide  itself  with  equipment. 
In  said  application  said  carrier  sets  forth : 

1.  That  the  amount  of  the  loan  desired  is  $4,446,525- 

2.  That  the  term  for  which  the  loan  is  desired  is  15  years,  with 
the  option  to  pay  off  all  or  part  at  an  earlier  date  if  applicant  so 
desires. 

3.  That  the  purpose  of  the  loan  is  to  assist  the  applicant  in  the 
acquisition  of  the  following  equipment: 

Locomotives:  16  Santa  Fe  type,  15  beavy  mikado,  and  15  beavf 

switchers $1,472,775 

Freight  equipment :  500  stock  cars,  1,000  refrigerator  cars,  1,000  box 

cars,  and  1,000  gondola  cars 2,978,700 

Total .    4,446,525 

4.  That  the  use  to  which  the  loan  will  be  applied  is  to  assist  the 
applicant  in  financing  the  purchase  of  the  aforesaid  equipment  in 
connection  with  expenditures  of  approximately  $10,394,025  to  be 
taken  care  of  by  applicant  Itself. 

5.  Its  present  and  prospective  ability  to  repay  the  loan  and  meeA 
the  requirements  of  its  obligations  in  that  regard. 

6.  That  the  security  offered  is  Chicago,  Burlington  &  Quincy 
general-mortga<^  4  per  cent  bonds,  due  March  1,  1958,  in  such 
amount  as  the  Commission  may  prescribe. 

r„iz.dDyG00gIc 


LOAK  30;  OmOMO,  BUBUVOTOV  ft  «DTKOT  B.  B.  4B 

7.  That  the  extent  to.  nhieh  tite  puUie  ooavenienDe  uid  iracesin^ 
will  be  served  Ls:  "  Part  oi  the  now  eqti^HDcnt  which  it  is  intended 
to  purchweia  Qaeeswry  to  Eeplw  cqaipment  ctureiitly  nCirod.  Id 
additipD,  the  volume  of  traffic  baa  iBcr^atod  to  ertich  an  ext«it  tint 
it  will  be  impossible,  unless  ndditioaaJ  frtight  power  utd  equipment 
is  provided,  to  huuUe  sU  'trsffie  offered  and  rendec  prompt  and 
efficient  aervice." 

Said  application  was  accompanied  by  such  facts  and  details  as  the 
Commission  required' with  rtspeet  tothit  physical  situation,  iwjker- 
ship^  capitalization,  indiBbtediiessi  ecntraot  obligations,  operation, 
and  earning  power  of  the  applicant,  together  with  such  other  facts 
T^ating  to  the  pn>priety  and  expeditn<7  o£  the  granting  of  the  loan 
applied  for,  and  the  ability  of  tte  «pp]itcamit  to  moke  good  tliB  oU*- 
gaftions,  aa  the  Comtnisdon  deemed  pertinent  to  the  inquiry. 
~  After  investigation,  the  Commission  finds  thai  the  making  in 
whole  of  the  propwed  loan  by  the:  United  States  for  the  aforesaid 
purpose  is  necessary  in  order  to  enable  applicant  properly  to  meet 
the  transportation  needs.of  the  puUto;  that  tbe  prospective  earning 
.powerof  the  applicant  and  the  character  and  value  of  tba  security  of* 
iered  reasonable  aBSutanee  of  the  api^icant's  ability,  to  repay  lbs 
loan  within  the  tiAe  fixed  tberefor;  and  to  meet  iix  other  obH^ 
tions  in  connection  with  ewAi  loui;  and  reasonable  protection  to 
the  United  States;  and  that-ap|duHuit  is  unable  to  provide  itsrif  with 
funds  necessary  for  the  aforesaid  purpose  from  otiier  sources  except 
at  excessive  rates  of  interest  The  loan  of  $1,446,626  for  si}uipoMtnt 
is  recommended  in  viaw  of  the  fact  that  applicant  itself  proposes 
to  jGntifiee  and  expend  f(V  equipment  the  som  of  $10^64,oefi  in  ad- 
dition to  the  expenditure  to  b«  made  ant  bf  the  loan  in  this  regard 
made  by  the  United  States,  the  total  pmposed  flxprnditare  being 
$14,840,650.  Fiulhermore,  the  grastlng  «i  this  loan  is  an  expedi- 
tious way  of  increasing  the  equipment  in  the  service  of  the  commeroe 
of  the  nation. 

An  appr^riata  certificate  will  be  issued. 


Otrtifieate  No.  7  for  a  Loan  vndei-  Section  tlO  of  the  TrtmapoHoHon 
Act,  1B&),  at  A-mended. 

The  Interstat«  Commerce  Commission  certifies  to  the  Secretary  of 
the  Treasury  is  findings: 

1.  That  the  making  of  a  loan  of  $4,146,625  by  the  United  SUt» 
to  the  Chicago,  Burlington  &.  Qiiincy  Railroad  Company,  hereinafter 
referred  to  as  the  applicant,  for  the  purpose  of  providing  applicant 
ea844*— 22— Vol  66 1  65 1.  C.  C 


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60  INTEBSTATB  COKUUCB  OOHHISSIOV  BBP08TS. 

with  equipment,  is  necessuy  to  eiiabt«  the  applicant  to'  properly 
^eet  the  transportation  needa  of  the  public. 

2.  That  the  pnnpectiTe  earning  power  of  tiie  applicant  and  the 
d»racter  and  value  of  the  security  offered  are  such  as  to  furnish 
reasonable  aseursnoe  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor  and  to  meet  its  other  obligations  in 
connection  with  such  loan. 

8.  That  the  anonnt  of  the  Ibui  which  is  to  be  made  is  $4,446,525. 
'  4.  That  the  time  from. the  making  thereof  within  which  the  loan 
is  to  be  repaid  is  15  years,  installments  to  be  paid  as  hereafter  to  be 
indicated. 

6.  That  die  terms  and  conditions  of  the  loan,  inchiding  the  secnrity 
to  be  given  for  r^myment,  are  as  follows: 

The  loan  is  to  be  -evidenced  by  applicant's  15  notes  for  $396,485 
each,  aggregating  $4,446,525,  payable  respectively  in  1,  S,  8,  4,  5, 6, 7, 
6,  '9, 10, 11, 12, 18, 14,  and  15  years  froob  the  ma^ng  of  tlie  said  loan, 
with  interest  at  the  nte  of  6  per  cent  per  annum,  payable  semi- 
annually.  Theee  notes  are  to  be  secured  by  a  second  lien  on  the  equip- 
ment, subordinate  only  to  the  first  lien  on  t^e  said  equipment  to 
secure  the  equipmmt  notes  for  the  balance  of  the  purchase  price  to 
be  sold  or  offwed  to  the  public.  The  notes  given  to  the  United 
States  or  equipment  notes  deposited  as  collateral  security  therefor 
to  be  secured  by  the  same  equipment-trust  indenture  or  agreement 
of  conditional  sale  by  which  the  said  eqniiHnent  notes  to  be  sold  or 
offered  to  the  public  are  secured ;  title  to  Uie  equipment  not  to  pass 
to  the  ^iplicant  nor  from  the  tnibtee  for  the  benefit  of  the  United 
States  until  the  loan  fnnn  the  United  States  has  been  paid  in  full, 
and  applicant  has  fulfilled  all  ita  obligations  in  regard  thereto.  The 
loan  from  the  United  Statee  to  be  further  secured  by  the  pledge  of 
the  following  amount  par  valne  of  bonds  now  held  in  applicant's 
treasnry :  $5,928,700  Chicago,  Burlington  &  Quincy  general-mortgage 
4  per  cent  bonds,  due  March  1, 1958.  Said  bonds  pledged  as  collateral 
security  are  to  be  released  proportionately  as  installments  are  paid. 
Applicant  shall  have  the  option  of  paying  any  or  all  installments  of 
the  loan  with  accrued  interest  at  any  time  before  maturity. 

As  a  further  condition  precedent  to  the  making  of  the  loan,  it  shall 
be  provided  that  the  amount  to  he  financed  by  the  applicant  in  con- 
nection therewith  shall  be  so  financed  that  the  cost  to  the  applicant 
of  any  bans  secured  from  sources  other  than  the  United  States 
government  shall  not  exceed  7  per  cent  per  annum,  including  in  such 
coat  discount,  attorneys'  fees,  and  any  and  all  other  expenses  in  con- 
tiection  therewith, 

65 1,  c.  a 


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LOAK  ID  HJJVOIS  <xsrRjaj  B.  B.  61 

A.  Thilt  the  proapective  eamiog  power  o£  the  appBcant,  toge&er 
with  the  character  and  T&Iue  of  the. security  offend,  furnish,  in  the 
opinioii  of  the  Commiasion,  reasoiuble  asmruioe  of  Uie  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor,  and  reason- 
«ble  protection  to  the  United  Stat^;-»nd 

7.  That  Uie  applicant,  in  the  opinion  of  the  CommiBnon,  is  ailable 
to  provide  itself  with  the  funds  necessary  for  the  aforesaid  purpose 
from  other  sources  except  at  excessire  rM«e  of  interest. 

Done  in  Washington,  D.  C.,  this  »th  dvf  of  July,  19S0. 


Finance  Dockbt  No.  WO. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  HXI- 
NOIS  CENTBAI.  BAILEIOAD  COMPANY  FOS  A  LOAN 
FROM  THE  UNITED  STATES  TO  PROVIDlE  IN  PART 
FOR  PURCHASE  OP  NEW  EQUIPMENT. 


BubmiUed  July  8.  I»t0.    DeetMt  /«lv  $.  /MO. 


AppUation  granted  and  loan  of  $4,911,750  approved. 

3f.  P.  Blttuvelt  for  applicant, 

RcroBT  or  THE  CoHH  isno^. 
DmsiON  4,  CoHHiSBioireiifl  Metes,  DANizta,  and  Easthan. 
Bt  DinsioN  4 : 

The  Illinois  Central  Railroad.  Company,  a  carrier  by  railroad, 
subject  to  the  interstate  commerce  act,  on  May  8,  X920,  made  appli- 
cation to  the  Interstate  Commerce  Commission  for  a  loan  from  the 
United  States  in  accordance  with  section  210  of  the  transportation 
act,  1920,  to  provide  itself  with  eC|uipment,  and  on  June  18,  1920, 
the  carrier  amended  and  suppleblented  its  application  pursuant  to 
the  Commission's  announcement  of  June  7, 1920,  of  the  general  prin- 
ciples by  which  it  would  be  governed  in  administering  the  fund 
created  by  section  310  of  said  act. 

In  the  application  as  amended  4nd  supplemented  the  carrier  6t>ts 
forth: 

1.  That  the  amount  of  the  loan  desired  is  $4,511,750. 

2.  That  the  term  for  which  the  loan  is  desired  is  15  years.  ' 

8.  That  the  purpose  of  the  loan  is'to  provide  in  part  for  the  pur- 
e  of  new  equipment  as  follows: 


osLaa 


ly  Google 


5S  INTBBSTATE  COUHBBOB  eOUUWBlOS  BBFOBTB. 

'-- -1„  $4, 8B0 'oOO 

— -■ .._^— ■-    l.te8.0» 

L_i — i    SiVtSiOtO 

One-half  eqwts  $%9ST,CO0l 
One-fourth  the  coat  of—  .     ,  , 

1,000  refrigerator  caw,  at  K«50  each '    4.650,000 

'  *»  flat  cars.  «  •2,210. oa«h ; -— __^ L i-'       *42,0« 

200  stock  cara.  at  J23B0  each -. ^--^v. ^,  :    SS&OOO 

fiO  caboose  cars,  at  $3,000  each ' J_l ,    16(^00O 

Total  «wt  of  frrffht  can —•- '—1-. :    e.Ofif.dOO 

One-foarth  eqlals ' $1,6^288.                                                           '•-■  "-''    • 
Total  of  fractional  parts 4, 611, 7B0 

i.  That  the  use  to  which  th«-4oaa  wilt-  be  applied  is  to  assist  tha 
applicant  in  financing  the  purchase  of  new  equipment,  the  total  cost 
of  which,  including  5fi  passenger-train  cars,  will  be  approximately 
$18,966,000. 

5.  Its  present  and  prospective  ability  to  repay  the  loan  and  meet 
-die  requirements  of  its  obligatioBS  in  that  tv^rd.'  -     '    '     '     '     '  1 

.6.  That  the  security  offered  ia  tllinoifl  <?uitral  Batlroad  Cbthpany 
rAfiinding-mortgage  4  per  cent  gold  bonds  of  i96S.      ' '  ~       '       ' 

7.  That  the  public  convenience  and  necessity  win  be'servAd  ^f  ihe 
supplying  of  cars  and  locomotives  to  be  used  in  the  transporbitioii 
of  freight  and  passengers.  ' 

Said  application  was  accompanied  by  such  facta  and  details  as 
the  Commission  required  with  reelect  to  this  .j^yucal  situation, 
ownership,  capitalization,  indebtedness,  c<mtract  obligatiossr  opora- 
tion,  and  earning  power  of  the  applicant,  together  with  sucli  other 
facts  relating  to  the  t)ropti'etf  And  expediency  of  granting  the  loan 
applied  for,  and  the  ability  of  the  appUcant  to  malceigood  the  obliga- 
tion, as  the  Commission  deemed  pertinent  to  the  inquiry.       .    .  i  ,  ^{ 

After  hearing  and,  investigation,  the  Cemmissi^ofi  ^nda  fh^b  ithe 
making  in  whole  of  the  proposed  loan  by  the  United  States  for  tl^^ 
aforesaid  purposes  is  necessary  in  order  to  enable  the  applipan^ 
properly  to  meet  the  tritnsportation  needs  of  the  public;. tha,t;ljif 
prospective  earning  power  of  the  applicant,  and,  character  an^ 
value  of  the  security  offered,  afford  reasonable  assuranpe  of  the  applir 
cant's  ability  to  repay  the  loan  ^ithin  the  time  fixed  therefor  aqd  to 
meet  its  other  obligations  in  connection  with  such-  loan,  and  reason- 
able protection  to  the  United  States;  and  that  applicant.is  unable 
to  provide  itself  with  funds  necessary  for  aforesaid  purpose^  frpm 
other  sources  except  at  excessive  rates  of  interest.  Furthermore,  th« 
granting  of  this  loan  is  an  expeditious  way  of  increasing  the  equip- 
ment in  the  service  of  the  commerce  of  the  nation.  .  .    ,  ,- 

An  appropriate  certificate  will  be  issued.  ... 

eis'i.c.a 


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OerN^cateXo.GfaratoOKUriderSeetionBlOafthe  TrcmtpoHation 
Aet^  3^&>i  a»  Amended. 

;  .Hue  'lotfrstate  Ccwunectn  Comnuqeioa  oertifiefl  to  tba  Secretavy  of 
t^  [Trea.qury  ito  fiofititi^: 

,,).  That  tU  toftkiiig  Qf  a  loss  of  $4^11,700  hj  tl)«  United  States 
to  the  Illinois  Central  Kailrood  Cotapaoy,  hereinaitor  referred  to 
aB,tb»  i^plicaoty  foe  the  puxpose  oi  proriding  tiui  applicant  with 
^qujpme^y  i$  naccssary  to  enaMe  the  applioaot  proparly  to  meet 
tta;^4q>ortatMn  neade  olf  the  publio. 

:  2.  lliat  the  proepeotiTe  earning  powor  of  the  applicant  and  the. 
character  and  value  of  tha  e»eurity  ofleted  ar*  auoh  as  to  fumieh: 
nasonab}*!  aisufaooa  of  the  appUoant's  ability  to  repay  the  loan 
^htlfiq  tha  time  fixed  thevaioE  and  to  meat  ita  othar  obligatioas  iq 
connecti^on  with  «ucb  loaa.  ,  ; 

3.  That  tha  amowit  9i  the  loan  viviib  is  to  be  made  is  $4^11.,T{)0. 

it  That  the  time  from  the  making  thereof  within  which  the  loan 
is  to  be  repaid  is  15  years,  installments  to  be  paid  as  hereinafter  indi- 
cated. 

a.  That  the  terms  and  conditions  of  the  loan,  including  the  security 
to  be  given  for  repayment,  are  as  follows : 

The  loan  b  to  be  evidenced  by  applicant's  15  notes  for  $300,780 
each,  payable,  respectively,  in  1,  2,  3,  4,  5,  6,  7,  8,  9, 10,  11, 12,  13,  14, 
and  15  years  from  the  making  of  said  loan,  with  interest  at  the 
rate  of  6  per  cent  per  annum,  payable  semiaimually.  These  notes 
are  to  be  secured  by  a  second  lien  on  the  equipment,  subordinate 
only  to  the  first  lien  on  the  same  equipment  to  secure  equipment 
notes  for  the  balance  of  the  purchase  price  to  be  sold  or  offered  to 
the  public.  The  notes  given  to  the  United  Stetes  or  equipment 
notea  deposited  as  collateral  security  therefor  to  be  secured  by  the 
same  equipment-trust  indenture  or  agreement  of  conditional  sale  by 
which  the  said  equipment  notes  to  be  sold  or  offered  to  the  public 
are  secured;  title  to  the  equipment  not  to  pass  to  applicant,  nor 
from  the  trustee  for  the  benefit  of  the  United  States,  until  the  loan 
from  the  United  States  has  been  paid  in  full  and  applicant  has  ful- 
filled all  its  obligations  in  regard  thereto.  The  loan  from  the 
United  States  to  be  further  secured  by  the  pledge  of  $5,414,000,  par 
value,  of  Illinois  Central  Railroad  Company  refunding-mortgage 
4  per  cent  gold  bonds  of  1965;  said  bonds  pledged  as  collateral 
security  to  be  released  proportionately  as  instellmente  on  the  loan 
are  paid.  Applicant  shall  have  the  privilege  of  paying  any  or  all 
installments,  or  any  or  all  parts  of  the  loan,  with  accrued  interest, 
at  any  time  before  maturity. 

6si.c.a 


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54  IKTEBSTATB  COHUBBCB,  OOMmSSIOV  BBK)BT&. 

As  a  further  condition  precedent  to  tbe  making  of  the  kwn,  it 
shall  be  provided  that  the  amount  to.  be  financed  by  the  applicant 
in  connection  therewith  shall  be  so  financed  that  the  cost  to  the 
applicant  of  any  loans  secured  from  sources  otber  than  the  United 
States  government  shall  not  exceed  7  per  cMit  per  annum,  includ- 
ing in  such  cost  discount,  attorneys'  feeSj-and  any  and  all  «tiier 
expenses  in  connection  therewith. 

6.  That  the  proq>ective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish,  in 
the  opinion  of  the  Commission,  reasonable  assurance  of  the  ap^i- 
cant's  ability  to  repay  the  loan  within  the  time  fixed  therefor  and 
reasonable  protection  to  the  United  States. 

7.  I^at  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  itself  with  the  funds  necessary  for  the  aforesaid  pur- 
poses from  other  sources  except  at  excessive  rates  of  interest. 

Dcme  at  Wasbingtrai,  D.  C,  this  »th  day  of  July,  1920. 

«Lca 


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liQUI  10  SALr  LAXX  *  JTEAB  B,  B.  '66 


FiNAKCa  Docket  No.  1016. 

IN  IHE  MATTER  OF  THE  APPLICATION  OF  THE  SALT 
LAKE  &  UTAH  RAILROAD  COMPANY  FOR  A  LOAN 
FROM  THE  UNITED  STATES  TO  AID  IN  MEETING  MA- 
TURING INDEBTEDNESS  AND  IN  PROVIDING  EQUIP- 
MENT  AND  OTHER  ADDITIONS  AND  BETTERMENTS. 


8nbmU$^  Jmo  18,  1920.    DtttOei  July  J*,  19t9, 


AfvUcatloB  snurted  In  part  and  ioam  of  |S8B,M0  cpttraved. 
W.  C.  Orem  sod  Bou  Beaion  for  applicant. 

SUPFLKUENTAL  RePOBT  OF  THE  CoitHISSIOM. 

DiTiaioN  4,  Coicici8sioK£B8  Meteb,  Daniels,  and  EAanuM. 
Bt  DinmoNi; 

The  Salt  Lake  &  Utah  Railroad  Compan;,  a  carrier  by  railroad 
subject  to  the  iateratate  commerce  act,  hereinafter  referred  to  as  the 
applicant,  made,  oa  May  7, 1920,  its  original  application  and  on  June 
18,  11^,  ita  amended  and  supplemental  application  to  the  Commis- 
sion, for  a  loan  from  the  United  States  in  accordance  with  section 
SIO  of  the  transportation  act,  1S90,  to  meet  its  maturing  indebtedness 
and  to  provide  itself  with  equipment  and  other  additions  and  better- 
ments. 

In  said  applications  the  applicant  sets  forth : 

1.  That  the  amount  of  the  loui  desired  is  $300,000. 

2.  That  the  time  for  which  the  loan  is  desired  is  five  years. 
8.  That  the  purposes  and  uses  of  the  loan  are : 

(a)  To  pB7  In  pAit  the  cost  of  new  equipment ..„_.. $64,600 

ih)  To  pay  In  part  the  coat  of  other  addltioca  and  betterment! E3, 4W 

(e)  To  pay  In  part  matnrltlea  held  by  banks,  IndlTlduals,  and  equlp- 

ment  companies 212.000 

Total »0,000 

4.  The  present  and  prospective  ability  of  the  applicant  to  repay  the 
loan  and  meet  the  requirements  of  its  cjbligations. 

fi.  That  the  security  offered  is  the  first  and  only  mortgage  bonds  of 
the  applicant's  issue,  bearing  6  per  cent  interest,  in  the  ratio  of  ISSJ 
per  cent  of  bonds,  par  value,  to  100  per  cent  of  loan. 

e6i.o.a 


59 


INTERST&TB  OOUUBBCE  OOIOCISSION.  BXfOBTS. 


6.  That  the  loan  will  aid  the  applicant  in  providing  itself  witfa 
equipment,  adequate  shop  facilities,  and  additional  sidetracks  and 
interchange  tracks,  and  will  also  aid  the  applicant  in  reestablishing 
its  credit;  the  attainment  of  the  foregoing  ends  will  serve  the  con- 
venience and  necessity  of  the  public. 

The  applications  were  accompanied  by  such  :(acts  as  the  Commis- 
sion required  with  respect  to  the  physical  situation,  ownership,  capi- 
talization, indebjtedpess,  con^raiot  obligations,  operation,  and  ewning 
power  of  the  applicant,  together  with  such  other  facta  relating  to  tha 
propriety  and  expediency  of  grantiog  the  loan  applied  for,  and  th« 
abiUty  of  the  applicant  to  m&)f»  good  the  obligation,  as  the  Commis' 
Edoa  deemed  pertinent  to  the  inquiry. 

There  was  filed  with  the  Commission  on  July  12, 1920,  by  the  ap- 
plicant's representative  and  traffic  manager,  a  sworn  statement  of  tb« 
new  capital  requirements  of  the  applicant  for  1920,  and  pertinent 
facts  with  respect  thereto.  Sud  statem«it  is  attached  to  the  applica- 
tion and  sets  out,  amongodiw  tilings,  the  following: 


ToUI 

ProTld«) 

Aibd 

SSSSCSl^T-: :•■.:■■■;  ■:::;::::-:-:-^-::::':;;;::: 

1135.  J» 

"•lis 

si.no 
4.  an 

nu,ra 

u,goo 
11,  coo 

«,8» 

SS^sSSrSSF^" 

13,000  jKdM  H  twUut  kl  Tuloul  poliita,iwiiimtnc  tuUr  aad  nim  tnlD 

n.m 

102.000 

78  too 

MalariHt. 

"S™ 

^^I^T^.^:^:'^T':":::::-\::::^^ 

its 

ToUl _ „ 

2m:»m 

ai,o}o 

3H 

ea5,M> 

asfiM 

ao,i» 

«6].o.a 

Digitized  by  GodgIC 


ijOAjr  so  {uLv  hAja  a  trtAH  b.  s.  57 

The  OoBtuunioii,  in  rcspouM  to  tlie  origin^  spplicatioii,  isaoed, 
«n  May  M,  l&SO,  its  certificate  No.  2  to  t^  Semttary  of  the  Trass- 
ury  for  $64,600  to  aid  the  applicant  in  paying  part  of  the  cost  of  ita 
requirements  for  equipment  ae  above  set  out.  There  remains,  there- 
fore,  for  the  connderation  of  the  Commiasitm  the  request  of  the 
applioaoit  for  a  loan  of  $386,400  to  aid  the  applicant  in  paying  in 
part  (a)  the  coet  of  other  additions  and  bettermuita,  |S3,400,  and 
(b)  maturities,  $212,000,  as  above  stated. 

The  American  Short  Line  Railroad  Association,  on  June  24,  19S0, 
recommended  a  loan  of  $336,400  for  the  purposes  stated  in  the 
foregoing  paragraph,  for  the  term  of  15  years,  the  principal  to  be 
repaid  in  annual  installments,  and  collateral  security  to  be  released 
pn>  rata  as  annual  payments  are  made. 

After  informal  hearings  and  investigation,  the  Commission  finds 
(1)  that  the  making  by  the  United  States  of  a  loan  of  $985,400  to 
enable  the  applicant  to  pay  in  part  the  cost  of  the  additions  and 
betterments,  and  to  pay  in  part  the  short-term  maturiUes  herein- 
above  set  out,  is  necessary  to  enable  the  applicant  properly  to  meet 
the  tranqtortation  needs  of  the  public;  and  (2)  that  the  prospective 
earning  power  of  the  applicant  and  the  character  and  value  of  the 
secuiity  offered  afford  reasondile  aesarsDC*  of  the  applicant's  ability 
to  repay  the  loan  within  the  time  fixed  therefor  and  to  meet  its 
other  obligations  in  connection  with  such  loan,  and  reasonable  pro*- 
taction  to  the  United  States. 

An  appropriate  certificate  will  be  issued. 


Certificate  No.  9  for  a  Loen  under  Section  610  of  the  Tnmtpartaiion 
Act,  19£0,  M  Amended. 

The  Interstate  Commerce  Commission  certifies  to  the  Secretary  of 
the  Treasury  its  findings ; 

(a)  That  the  making  of  a  loan  of  $235,400  by  the  United  States 
to  the  Salt  Lake  &  Utah  Railroad  Company,  hereinafter  referred  to 
as  the  applicant,  for  the  purpose  of  aiding  it  to  pay  the  cost  of 
the  additions  and  betterments  and  to  pay  in  part  the  short-term 
nuturities,  as  stated  in  the  accompanying  report,  is  necessary  to 
enable  the  applicant  properly  to  meet  the  transportation  needs  of 
the  public. 

{h)  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  afford  reasonable  assur> 
ance  of  the  applicant's  ability  to  repay  the  loan  within  the  time  fixed 
therefor,  and  to  meet  its  other  obligations  <n  connection  with  such 
loan,  and  reasonable  protection  to  the  United  States. 
esLCC. 


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68  INTEBSTAIB  OOUUEBOE  COMWS&IOV  KBPOBTB. 

(o)  That  the  aJDOont  of  the  loan  v\acb.  is  to  be  nudfr  is  $236,400. 

(dy  That  the  time,  from  the  making  thereof  vi^n  which  the 
loan  is  to  be  repaid  in  full  is  15  years. 

(«)  ThiU  the  terms  and  conditions  of  the  Joan,  including  the  se- 
curity to  be  given,  are  as  fallows:  The  loan  shall  be  eTidcnced  by 
the  s{^licaDt'a  notes  (15  in  number),  shall  be  for  the  amount  of 
principal,  imd'  shall  mature  1  to  15  years  from  date  thereof^  as 
follows : 

...  Fiioctpol.   HMlrttl. 

Note  No.    1 „.„ - W5.700       J821 

Note  No.     2 , IB,  TOO        1922 

Note  No.    3 : . , - 15,700        1628 

Note  No.    4 15,700        1824 

Note  No.    D 15,700       1925 

Note  No.    6 ., 115,700       1836 

Note-No.    7 .. 1B.70O       1B2T 

Note  No.    8 ,-- 15.  700        1938 

Note  No.    9 -_; . 1 IB,  TOO        1929 

Note  No.  10 . 15,700       1930 

Mote  No.  11 1 15,700       1931 

N»te  No.  12- ^— . 16.  TOO       W82 

Note  No.  13 15,700        193S 

Note  No.  14 15,700       1684 

Note  No.  16 16, 609       1985 

Said  Dotoi  shall  bear  interest  at  6  per  oent  per  annum,  payable  semi- 
annually. The  applicant  may  pay  off  at  any  time  all  or  any  number 
of  the  notes  with  accrued  interest  prior  to  maturity  thureof.  Said 
notes  shall  be  ooUateraJly  secured  by  the  pledge  of  the  first-mortgage 
bonds  of  the  applicant  in  the  ratio  of  183^  per  cent  of  bonds  par 
value  to  100  per  cent  of  loan. 

As  the  aforesaid  several  annual  payments  of  principal  and  accrued 
interest  are  made,  there  shall  be  released  and  surrendered  to  the 
applicant  the  requisite  pro  rata  of  the  aforesaid  collateral  security, 
the  understanding  being  that  the  par  value  of  the  aforesaid  collateral 
security  shall  always  be  not  less  than  188^  per  cent  of  the  loan 
outstanding. 

(/)  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  afford,  in  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  Joan  within  the  time  fixed  therefor  and  reasonable 
protection  to  the  United  States,  and 

(g)  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  itself  from  other  sources  with  the  funds  necessary  for  the 
aforesaid  purposes. 

I>one  at  Washington,  D.  C,  this  14th  day  of  July,  1920. 

9si.o.a 


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LOAB  XO  AXGHUOH,  TOTBKi,  *  SANTA  KB  VX. 


FtxANCK  Docket  No.  922. 

IN  THE  HA.TTEB  OF  THE  APPLICATION  OF  THE  AT- 
CHISQK,  TOPEKA  A  SANTA  FE  RAILWAY  GOUPANT 
FOB  A  LOAN  TO  AID  IN  PROVIDING  EQUIPMENT. 


B*bwttttea  Jutf  7,  1910.    Decided  Jvly  19,  ISW. 


AppUothMi  mnted  in  part  and  loon  of  |5,493,W0  approved. 
IT.  B.  Stony  for  applicant. 

Rbfovt  op  the  CoHHIBSlOir, 
Dinaioir  i,  Covhibsiohbbs  Mxtxb,  Danuu,  and  Ea9tm an. 
BrDtTUi0N4: 

Tha  Atchiaon,  Topeln  A  Santa  Fe  Railway  Company,  hcranafter 
oalled  the  applicant,  is  a  carrier  by  railroad  nibject  to  the  interetata 
cwnitteroa  act  On  May  SO,  1920,  it  made  application  to  the  Inter- 
fltaU  Commerce  Commission  for  a  loan  from  the  United  States  in 
acoardaoce  with  section  210  ol  the  tnuupoptatlon  act,  1920,  as 
amanded,  to  provide  itsdf  with  equipmuit,  and  on  June  21, 1920,  the , 
carrier  filed  with  the  Commissicai  an  amended  and  supplemental 
^^lication  pursuant  to  the  Commission's  aunounoement  of  June  7, 
1920,  of  the  general  principles  by  ^i^ch  it  would  be  governed  in 
administering  the  fund  created  by  section  210  of  said  act. 

In  tin  application  aa  amended  and  supplemented  the  earner  seta 
fottb: 
1.  That  the  amouBi  of  the  loan  desired  is  $10,POO/)00. 
S.  That  the  term  for  which  it  is  desired  ia  16  years. 
i.  That  the  porpose  of  the  loan  is  to  provide  in  part  for  the  pur- 
chase of  new  equipment  as  follows: 

2,000  nftlsentor  cmn,  at  $4,760  euk 111,  ST5,  COO 

000  goDdolSB.  at  (8,008  each 1,  SOI,  SOO 


4.  That  the  use  to  which  the  loan  will  be  applied  is  to  assist  the 
applicant  in  financing  the  purchase  of  the  aforesaid  new  equipment. 

6.  Its  present  and  prospective  ability  to  repay  the  loan  and  meet 
the  requirements  of  its  obligations  in  that  regard. 

9.  'liuU.the  security  offered  is  such  amount  of  the  applicant's  com- 
mon and  prefbntd  capital  .stock  as  nu^  be  found  nasimahly  xe* 


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60  nfTBBSTATB  ODHMEBOB  CQUMISSIOB  It&p6M^. 

quired,  there  being  avaiUble  $17,011,000  par  value  of  the  former 
and  $7,286,500  par  value  of  the  latter. 

7.  That  with  its  present  equipment  fthe,  applicant  is  unable  to  meet 
the  demands  on  it  for  freight  transportation,  and  that  the  public 
cQHTeoienoe  and  necftssity  will' .be  sairdd  ly*  tH«!^^^iyin^'«r  tKtf 
aiotttsdiid  cars  and -l<>«omDtiTeB  to!b^  i»ed.id  Ihd'ttAAspdMKtUA  Of 
freight,  partiotilvly  perishable  fmight,  :iirhich  lot&tfmtiWm^  ibe 
refused. 

Said  application  was  accompanied  by  s^^^fact^i^. details  as  the 
Commission  required  with  respect  to  the  physical  situation,  owner- 
ship, capitalization,  indebtedness,  contract  obligations,  operation,  and 
earning  power  of  the  applicant,  together  with  such  other  fat^r^lyt- 
ing  to  the  propriety  and  expediency  of  grsntiti^  fhi  loan  applied 
for,  and  the  ability  of  the  applicant  to  malf;^.g|'}9d  the  obligation  as 
the  Commission  deemed  pertinent  to  the  inquiry. 

After  investigation  the  Commission  finds  that 'Ae  nAKiltfg  Ifl'part 
of  the  proposed  loan:  .  ^■„-},i*-i  y''. 

Cme-fDorth  the esHmoted  coat  of  2,SQ0  reft1genfor'crinjJ:J.^l'i-J.i'^9eBj^ 

OiM-foDTth  til?  estimated  cost  of  GOO  toaioiaM.-,-iL.^ ■.: -i_'-^:    ' -flbiloo 

Ooe-balf  tbe  eBtimated  cost  of  50  beavy  frcltfrt  loooq>o^eiUJ.-.4_  .9,M)v4C* 
,  Total _„, -_., ^f..„,-^_-^„*.  H.my9»- 

by  the  0nited  States  for  the  aforesaid  pui^oses'is  nec^ar^Wi^Met''- 
to  enable  tbe  applicant  properly  to  meet  the  tralnspdrtatii^'neiMlk 
of  the  put^;  that  th«  prospective  earning'  ^ot»*  *?  th*  kppHttSiit!,' 
and  character  and  value  of  the  secnrity  offeAd,  aff&fii  ttrtiiflnaHlif- 
assurance  of  the  applicant's  ability  to  repays  tbie  lo&nwithin  the  tim'e' 
fixed  therefor,  and  to  meet  its  other  obligatlcAifl  in  Mn&eetiOii  With 
satih  loan,  and  reasonable  protection  tothe  Uidted  Statesi,*-^^  tlmt 
the  applicant  is  unable  to  provide  itself  with  funds  necessary  tit- 
aforesaid  purposes  from  other  sonrcts  except  M  escesEnW  'rsttts  of 
interest.  Furthermore,  the  granting  «f  thiftleetite  dQ  -ik^Rious 
way  of  increasing  the  equipment  in  the  service'  of  tiM  cdftUBMrfceef 
the  nation.  '    ■        .'■    ■•    '  '     '  '■  ■ 

An  appropriate  certificate  will  be  issued. 


Certificate  No.  8,  for  a  Loan  under  Section  SiO  of  the  Trantj^OTjtftifn 
Act,  19S0,  at  Amended.      „     ,    ...    -,,,.;;^,^|^ 

The  Interstate  Coounerce  Commiasion'  certiflcB  >to  ^hm  SMQBttdy-U 
the  Treasury  its  findings:  .,■..-.  ii-,i        ,  ..j 

1'.  That  the  making  of  a  loan  of  {S^eB^aOObythe-Uuited  Statca 
to  the  Atohison,  Tc^wka  •&  Santa  Ft  fiailmiy.Compai^yi^ieinafteD 


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l<0ftK>TO  AIOHISWTy.TOPKIU  A  SAHXA.  FE  RT>  <q1 

JK^cisd  t9iaKtli«>^PVliauitffor  the  purpose,  of  providing  the,appH- 
oot  witb  e^uipipci^,  is  aeceMary  to  enable  tliQ  applicant  properly 
ti>ja^t.Uiel,ranBportBtioa:9eeds.af  .the  pubUc.  ! 
.  ■^'-DtAt.tba.pirvsi^tec^ye  es^uig  power  of  the  applicant  aod  the 
duncter  and  value  of  the  eeeuxity ;  oifferad  are  audi,  as  to  furiiieh 
inminible  a$sura«CA  of' dw.  applicant's  ability  to  r^»y  the  Ipan 
sithio  fba  tqne  fixed  therefoc  and  to  meet  its  other  obligations  in 
caDnectifii..;tfifA  such Hoan..    - 

3.  That  thv^n^tint-of -^)^  |p»i^  tshich  is  >tp  be  made  is  $5,493,6p{l. 

."L  lliit  the  time  from  the  making  thereof  Trithin  which  the  loan 
it  to  be  repaid  is  15  years,  installments  to  be  paid  as  hereinafter  in- 
dicated. 

6.  That  the  terms  and  conditions  of  the  loan,  including  the  security 
to  be  given  for  repayment,  are  as  follows: 

The  loan  is  to  be  evidenced  by  applicant's  15  notes,  each  for 
$366,240,  payable,  respectively,  in  1,  2,  3, 4,  5,  6,  7,  8,  9, 10, 11, 12,  13, 
14,  and  15  years  from  the  making  of  said  loan,  with  interest  at  the 
nte  of  6  per  cent  per  annum,  payable  semiannually.  These  notes  are 
to  be  secured  by  a  second  lien  on  the  equipment  subordinate  only  to 
the  first  lien  on  the  same  equipment  to  secure  equipment  notes  for 
the  balance  of  the  purchase  price  to  be  sold  or  offered  to  the  public. 
The  notes  given  to  the  United  States  or  equipment  notes  deposited 
u  collateral  security  therefor  to  be  secured  by  the  same  equipment- 
trust  indentures  or  agreement  of  conditional  sale  by  which  the  said 
equipment  notes  to  be  sold  or  offered  to  the  public  are  secured ;  title 
la  tbe  equipment  not  to  pass  to  the  applicant,  nor  from.the  trustee  for 
tbe  benefit  of  the  United  States,  until  the  loan  from  the  United  States 
1ms  been  paid  in  full  and  applicant  has  fulBUed  all  its  obligations  in 
r^rd  thereto.  The  loan  from  the  United  States  to  be  further 
secured  by  the  pledge  of  applicant's  capital  stock  as  follows :  Common 
Bteck  of  the  par  value  of  $5,500,000;  preferred  stock  of  the  par 
nine  of  $3,850,000;  making  a  total  par  value  of  $9,350,000;  said 
ctpital  stock  pledged  as  collateral  security  to  be  released  propor- 
tionately as  installments  on  the  loan  are  paid.  Applicant  shall  have 
tbe  privilege  of  paying  any  or  all  installments,  or  any  or  all  parts  of 
the  loan,  with  accrued  interest,  at  any  time  before  maturity.  As  fur- 
tlier  condition  precedent  to  the  making  of  the  loan  it  shall  be  provided 
^iit  the  amount  to  be  financed  by  the  applicant  in  connection  there- 
nth  shall  be  so  financed  that  the  cost  to  the  applicant  of  any  loans 
wnred  from  sources  other  than  the  United  States  government  shall 
nrt  exceed  7  per  cent  per  annum,  including  in  such  cost  discount, 
■ttomeys*  fees,  and  any  and  all  other  expenses  in  connection  there- 
with. 

OSLCa 


D,=;,lz...,C00gIC 


62  nnxBSTATB  oouhbbcb  oohiossion  WMKoan. 

6.  That  the  prospective  earning  power  of  the  apptkuitf  togathv 
with  the  character  and  the  Talue  of  the  aecnrity  offered,  famiA,  b 
the  opinion  of  the  CommiBsion,  rei«on«bl«  assurane*  of  the  sppB- 
cant's  ability  to  repay  the  loan  within  the  time  fixed  tiwrefor  ud 
reasonable  protection  to  tjie  United  States. 

T.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  nnalils 
to  provide  itself  with  the  funds  necessaiT'  for  the  aforesaid  por^ 
poses  from  other  sources  except  at  excessive  rates  of  interest. 

Done  at  Washington,  D.  C,  this  X8th  day  of  July,  1990. 


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8I00K  tSSat  OF  KOBFOLK  ft  WESlfcKK  BY. 


Finance  Dockpt  No.  10. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  NOB- 
FOLK  &  WESTERN  RAILWAY  COMPANY  FOR  AU- 
THORITY TO  CONTINUE  THE  ISSUE  OF  STOCK  IN 
EXCHANGE  FOR  CONVERTIBLE  BONDS. 


Submitted  Jvlp  It,  mo.     Decided  July  H,  1920. 


Authority  granted  aa  o(  Jun«  2S,  1S20,  for  the  issue  of  common  captt«l  stock  in 
exchange  for  snd  against  the  surrender  and  cancellation  of  aii  equal  amount 
In  par  value  of  convertible  gold  bonds  In  accordance  with  the  terms  of 
certain  indentures. 

E.  H,  Alden  for  applicant. 

Rbfobt  and  Order  or  thb  CoHHtaaiOH. 

DiVIStON  4,  COMMISBIOKBBS  MeTIB,  DaNIBU,  EabTMAN,  AND  POTTER. 

Bt  Division  4; 

It  appearing^  That  the  Norfolk  &  Westeni  Railway  Company  has 
petitioned  this  Commission  for  authority  under  section  20a  of  the 
interstate  commerce  act  to  continue  the  issue  of  it"  "nmrn^n  -onifoi 
stock  in  exchange  for  and  against  the  surrender  a 
an  equal  amount  in  par  value  of  (I)  its  convertibl 
cent  gold  bonds,  in  accordance  with  the  tenns  of  a 
March  1,  1912;  (2)  its  convertible  10-25-yBar4i  p< 
in  accordance  with  the  terms  of  an  indenture  date 
and  (3)  its  convertible  10-year  6  per  cent  gold  boi 
with  the  terms  of  an  indenture  dated  January.  25, 
these  bonds  were  issued;  and  full  investigation  o 
focts  therein  involved  having  been  had ;  and  it  apf 
the  terms  of  the  indentures  the  entire  bond  issui 
become  due  and  payable  on  default  of  said  exchange  on  demand;  and 
it  further  appearing  that  notice  of  said  petition  has  been  given 
to  and  copy  thereof  filed  with  the  governor  of  each  state  in  which 
the  carrier  operates,  as  provided  in  the  aforesaid  section;  and  the 
Commission,  after  due  consideration  of  all  the  evidence  submitted, 
being  of  the  opinion  that  said  petition  should  be  allowed : 

It  is  ordered,  That  the  Norfolk  &  Western  Railway  Company  be, 
and  it  is  hereby,  authorized  to  continue,  in  accordance  with,  and 
pursuant  to,  the  terms  of  three  certain  indentures  dated  March  1, 
1912,  March  25,  1913,  and  January  25,  1919,  respectively,  between 

65I.C.a 

oogk 


6i  INTERSTATE  COMMBBCB  COUUiaSIOIT  K^OKTS. 

petitioner  and  the  Guaranty  Trust  Company  of  New  York,  trustee, 
true  copies  of  each  of  which  being  on  file  in  this  proceeding,  (1)  the 
issue  of  its  coounon  capital  stock  out  of  the  rema  ining  duly  authorized 
and  unissued  shares  of  the  133,000  shares  of  Uie  aggregate  par  value 
of  $13,300,000  reserved  for  the  purpose  under  the  aforesaid  inden- 
ture dal«d  March  1, 1912,  in  exchange  for  and  against  the  surrend^ 
and  canceDation  of  an  equal  amount  in  par  value  per  share,  at  the 
time  of  convemon,  of  its  convertible  10-20-year  '4  per  cent  gold  bonds 
due  and  payable  September  1, 19^  issued  under  the  indenture  dated 
March  1, 1912,  on  or  at  any  time  before  September  1,  1922,  but  not 
later;  (2)  the  issue  of  its  common  capital  stock  out  of  the  remaining 
duly  authorized  and  unissued  shares  of  the  183,530  shares  of  the 
aggregate  par  value  of  $18,353,000,  reserved  for  the  purpose  under 
the  aforesaid  indenture  dated  March  25,  1913,  in  exchange  for  and 
against  the  surrender  and  cancellation  of  an  equal  amount  in  par 
value  per  share,  at  the  time  of  conversion,  of  its  10-25-year  H  per 
cent  gold  bonds  due  and  payable  September  1, 1938,  issued  under  the 
indenture  dated  March  25, 1913,  on  or  at  any  time  before  September 
1,  1923,  but  not  later;  and  (3)  the  issue  of  its  common  capital  stock 
out  of  the  remaining  duly  authorized  ajid  unissued  shores  of  the 
179,450  shares  of  the  aggregate  par  value  of  $17,945,000,  reserved 
for  the  purpose  under  the  aforesaid  indenture  dated  January  25, 
1919,  in  exchange  for  and  against  the  surrender  and  cancellation  of 
an  equal  amount  in  par  value  per  share,  at  the  time  of  conversion,  of 
its  convertible  10-year  6  per  cent  gold  bonds  due  and  payable  Sep- 
tember 1,  1929,  issued  under  the  indenture  dated  January  25,  1919, 
on  or  at  any  time  before  September  1,  1929,  but  not  later. 

It  is  further  ordered^  That  all  of  said  common  capital  stock  re- 
served but  not  issued  by  (1)  midnight  of  September  1,  1922,  as  pro- 
vided in  the  indenture  dated  March  1,  1912;  (2)  midnight  of  Sep- 
tember 1,  1923,  as  provided  in  the  indenture  dated  March  25,  1913; 
and  (3)  midnight  of  September  1,  1929,  as  provided  in  the  in- 
denture dated  January  25, 1919,  shall  ^  issued  or  otherwise  disposed 
of  only  by  order  of  this  Commission. 

And  it  U  further  ordered.  That  this  order  take  effect  on  the  26th 
day  of  June,  1920,  and  continue  in  force  until  otherwise  ordered  or 
amended  by  this  Commission. 

es  I.  c.  a 


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BOHVft  or  CKNIUL  OV  OBWQIA  BT. 


FlVANCB  DOCKBT  No.  8. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  CEN- 
TRAL OF  GEORGIA  RAILWAY  COMPANY  FOR  AU- 
THORITY TO  GUARANTEE  BONDS  OF  THE  OCEAN 
STEAMSHIP  COMPANY  OF  SAVANNAH. 


atAmttu*  jutt  a,  lato.   d«mm  juIv  jt,  iw. 


A.iithorlt7  irantcd  to  marantoe  parnwnt  of  $1,000,000  flrtt-mortgaEe  S  per  cent 
80-;eftr  sold  bonda,  Includlns  interast  Uwreon,  of  ttae  Otxta  Steanublp 
Compaoy  of  SaTamial]. 

A,  R.  Lawton  for  »pplicuit. 

Report  Aiat  Obdeb  of  the  Cohkibsiok 
DnrmoN  4,  CoHicMnoNEiis  Msm,  Damibi^  Eabtmah,  and  Poftbb. 
Bt  Division  4: 

Upon  consideration  of  the  record  and  of  the  evidence  sabmittod, 
and  full  iDTestigation  of  the  matters  and  things  therein  involved 
having  been  had,  and  it  appearing  that  notice  thereof,  together  with 
cop;  of  said  application  has  been  filed  with  the  governor  of  each 
state  in  which  the  Central  of  Georgia  Railway  Company  operates, 
as  provided  in  section  20a  of  the  interstate  commerce  act,  and  this 
Commission,  after  due  consideration,  being  of  the  opinion  that  the 
guaranty  of  the  bonds  and  interest  thereon  (a)  is  for  a  lawful  ob- 
ject, within  the  corporate  purposes  of  the  Cuitral  of  Georgia  Rail- 
way Company  and  compatible  with  the  public  iuterest,  which  is 
necessary  and  appropriate  for  and  consistent  with  the  proper  per- 
formance by  it  of  service  to  the  public  as  a  common  carrier,  and 
which  will  not  impair  its  ability  to  perform  that  service,  and  {b)  is 
reasonably  necessary  and  appropriate  for  such  purpose : 

li  ia  ordered^  That  the  Central  of  Georgia  Railway  Company  be, 
and  it  is  hereby,  authorized  to  guarantee  unconditionally  the  due* 
and  punctual  payment  of  the  principal  sum  and  interest  thereon  of 
the  first-mortgage  5  per  cent  80-year  gold  bonda  of  the  Ocean  Steam- 
ship Company  of  Savannah,  due  July  1, 1920,  of  the  aggregate  face 
value  of  $1,000,000,  issued  under  a  first  mortgage  dated  July  1, 1890, 
of  which  the  Central  Union  Tnist  Company  of  New  York  is  trustee, 
and  guaranteed  by  the  Central  Railroad  &  Banking  Company  of 

65 1.  C.  C. 

fla844'— 22— VoI66 « 

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66  niTBBBT&TB  C»MHBBCB  OOUKOSIOS  BBPORTS. 

0«orgu,  predecesaor  of  the  Centrftl  of  G^eorgia  Railway  Compuiy, 
and  by  agreement  dated  June  30,  1920,  between  the  steamship  com- 
pany and  said  trust  company,  extended  for  a  period  of  five  years 
from  July  1,  1920,  to  July  1,  1925,  with  interest  payable  thereon 
semiannually  at  the  nte  of  7  per  cent  per  annum,  subject  to  the 
redemption  of  all.  of  said  bonds  on  any  interest  day  after  July  1, 
1922,  and  prior  to  July  1,  1925,  at  the  principal  amount  thereof  and 
accrued  interest  plus  a  premium  equal  to  one-half  of  1  per  cent  of 
the  principal  amount  for  each  six  months  between  the  redemption 
date  and  the  date  of  maturity. 

It  M  further  ordered,  That  the  authority  hereby  giveai  to  guar- 
antee said  bonds  and  interest  thereon  shiUl  apply  only  to  bonds  of 
said  issue  of  the  Ocean  Steamship  Company  of  Savannah  outstand- 
ing and  unredeemed  on  the  1st  day  of  July,  1920,  and  the  interest 
thereon  aocndng  during  said  penod. 

/(  it  further  ordered,  That  this  order  shall  take  effect  on  the  17th 
day  of  July,  1920,  and  continue  in  force  antil  oUin-wise  ordered  by 
the  CommiBsion. 

And  it  is  further  ordered.  That  nothing  herein  shall  be  construed 
to  imply  uiy  gnarsnty  or  oUigation  as  to  said  bonds,  or  the  interest 
thereon,  on  the  part  of  the  United  States. 

«61.G.a 


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[   TO  ATLANTA,  BnUOKGHAJI  A  ATLASTIC  BT. 


FiNAvcB  DocKsr  No.  924. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE 
ATLANTA,  BIRMINGHAM  A  ATLANTIC  RAILWAY  COM- 
PANY FOR  A  LOAN  FROM  THE  UNITED  STATES  TO 
AID  IN  MEETING  MATURING  INDEBTEDNESS  AND 
PROVIDING  EQUIPMENT. 

B*bmiUe4  July  5.  lOtO.    DeoiO^t  J»lv  10.  19t$. 

Appltcfltlon  Kranted  In  part  and  loan  of  1:200,000  approved. 
W.  G.  BrantUy  for  applicant. 

Report  or  the  Commissiok. 
Division  4,  CoMHiefiiONERB  Metek,  Danieu,  and  Easthan. 
Bt  Division  4 : 

The  Atlanta,  Birmingbam  &  AUantic  Railway  Company,  a  car- 
rier by  railroad,  subject  to  the  interstate  commerce  act,  hereinafter 
referred  to  as  the  applicant,  made  on  June  15, 1920,  its  original,  and 
on  July  5,  1920,  its  amended  and  supplemental,  application  to  the 
Commission  for  &  loan  from  the  United  States,  in  accordance  with 
section  210  of  the  transportation  act,  1920,  as  amended,  to  meet  its 
maturing  indebtedness  and  to  provide  itself  with  equipment. 
In  said  application  the  applicant  sete  forth : 

1.  That  the  amount  of  the  loan  desired  is  $400,000. 

2.  That  the  time  for  which  the  loan  is  desired  is  15  years. 

3.  That  the  purposes  of  the  loan  are  (a)  to  pay  in  part  a  short- 
term  loan  of  $475,000,  maturing  July  19,  1920,  s&id  part  payment 
amounting  to  $200,000,  and  (6)  to  make  initial  payment  on  a  pro- 
posed purchase  of  five  freight  locomotives,  total  cost  $400,000,  said 
initial  payment  amounting  to  $200,000. 

4.  That  the  use  to  which  the  loan  will  he  applied  is  to  enable  the 
applicant  to  pay  part  of  the  above-mentioned  maturity  and  ranew 
the  remainder  thereof,  and  to  aid  the  applicant  in  providing  itself 
with  five  freight  locomotives, 

5.  The  present  and  prospective  ability  of  the  applicant  to  repay 
the  loan  and  meet  the  requirements  of  its  obligations. 

6.  That  the  security  offered  is  the  first  and  refunding  mortgage 
gold  bonds  of  tiie  applicant's  issue,  and  a  second  lien  on  the  locomo- 
tives. ' 

B6I.C.0.  .Higle 


68  mTERBTATE  COHMEBCE  COMMISSION  REPORTS. 

7.  That  the  public  conTenience  will  be  served  b;  the  making  of 
iht  loan  in  that  the  failure  of  the  applicant  to  pay  the  maturity 
in  part  would  threaten,  if  it  did  not  result  in,  the  insolvency  of  ibo 
applicant  and  in  addition  cause  the  sacrifice  of  the  securities  of  the 
applicant  pledged  as  collateral  security  for  the  maturity,  and  that 
the  locomotives  are  needed  to  move  promptly  the  traffic  that  is  being 
hauled  over  the  applicant's  railway,  and  the  acquisition  of  these 
locomotives  will  result  in  the  more  prompt  and  efficient  handling  of 
equipment,  thereby  adding  to  the  total  equipment  available  for  load- 
ing. 

The  application  was  accompanied  by  such  facts  as  the  Commis- 
mos  required  with  respect  to  the  physical  situation,  ownership, 
capitalization,  indebtedness,  contract  obligations,  operation,  and 
earning  power  of  the  applicant,  together  with  such  other  facts  re- 
lating to  the  propriety  and  expediency  of  granting  the  loan  applied 
for,  and  the  ability  of  the  applicant  to  make  good  the  obliga^on, 
as  the  Commission  deemed  pertinent  to  the  inquiry. 

Attached  to  the  application  is  a  letter  dated  July  6, 1920,  addressed 
to  the  Commission  by  W.  6.  Bruitley,  special  counsel  of  the  appli- 
cant, in  which  it  is  stated  that  the  applicant  is  handling  a  large 
tonnage  of  fuel  coal  for  other  carriers  at  a  loss  under  inadequate 
rates,  and  that  if  the  rat«s  should  be  increased  by  the  Commission  bo 
as  to  permit  a  profit  on  tiiis  fuel-coal  traffic  the  additional  locomo- 
tives would  be  needed,  but  otherwise  not,  as  in  the  latter  event  the 
applicant  would  probably  seek  to  discontinue  handling  at  a  loss  fuel 
coal  for  other  carriers;  and  that  for  the  foregoing  reasons  the  appli- 
cant requests  deferred  consideration  by  the  Commission  of  that 
part  of  its  application  asking  for  a  loan  for  locomotives. 

AJso  attadied  to  the  application  is  a  letter  dated  June  15,  1920, 
addressed  by  the  National  Bank  of  Commerce,  New  York,  to  the 
president  of  the  applicant,  requesting  applicant  to  pay  at  maturity, 
July  19,  1920,  with  interest,  the  short-term  note  of  $478,000,  herein- 
above referred  to.  In  the  said  letter  it  is  stated  (a)  that  the  loan 
was  made  originally  in  September,  1917,  for  a  period  of  six  months, 
with  the  understanding  that  it  would  be  paid  at  its  maturity  from 
earnings  and  refunding  operations  then  in  contemplation;  (i)  that 
instead  of  the  loan  being  retired  in  accordance  with  the  understand- 
ing had  when  the  loan  was  made,  it  had  been  renewed  from  time 
to  time  until  it  had  taken  on  the  character  of  a  permanent  loan; 
(o)  that  the  bank  does  a  commercial  business  and  requires  its  funds 
for  making  loans  for  the  current  purposes  of  its  customers;  and 
(d)  that  the  bank  has  at  no  time  planned,  in  view  of  the  character 
of  its  buflineM,  to  make  pennanent  loana  or  loans  for  capital 
purposes. 

DigilizedbyClOdglC 


LOAM  TO  ATLANTA,  BTRHTNOHAH  A  ATLANTIC  RY.  69 

Aim  ftOcompajifiDg  the  tpplicstioii  is  a  second  letter  dated  June 
86,  1920,  addrsssed  b;  tlie  aforesaid  bank  to  the  president  of  the 
applicant,  expressiDg  its  Trillingness,  in  event  of  payment  of  at  least 
$200,000  at  or  before  maturity,  to  renew  the  loan  for  the  remainder 
thereof — $275,000 — for  the  period  of  four  months,  and  to  surrender 
collateral  security  of  the  applicant  proportionate  to  the  total  of  said 
security  now  held  against  the  loan  of  $475,000.  It  is  shown  in  the 
application  that  the  collateral  security  pledged  for  the  loan  is  the 
applicant's  first  and  refunding  mortgage  gold  bonds  of  par  value 
of  $700,000. 

In  the  letter  dated  July  6,  1920,  hereinabove  referred  to,  the 
security  definitely  offered  for  the  loan  requested  is  the  first  and 
refunding  mortgage  gold  bonds  of  the  applicant's  issue,  par  value  of 
$295,000,  which  will  be  released  by  the  National  Bank  of  Commerce, 
New  York,  upon  payment  to  it  by  the  applicant  of  $200,000  in 
reduction  of  the  short-term  note  of  $475,000. 

In  a  letter  dated  July  13, 1920,  from  W.  G.  Brantley,  special  counsel 
for  the  applicant,  the  offer  of  additional  security  is  made,  namely, 
$400^000  par  value  of  15-year  5  per  c«nt  income  mortgage  gold  bonds 
of  the  applicant's  issue. 

After  informal  hearings  and  investigation,  the  Commission  finds: 

(a)  That  the  making  by  the  United  States  of  a  loan  of  $200,000  to 
enable  the  applicant  to  make  part  payment  of  $200,000  on  its  loan  of 
$476,000,  which  matures  at  the  National  Bank  of  Commerce,  New 
York,  on  July  19,  1920,  is  necessary  in  order  to  enable  the  applicant 
proporly  to  meet  the  transportation  needs  of  the  public. 

(b)  That  the  prospective  earning  power  alone  of  the  applicant  does 
not  afford  reasonable  assurance  of  the  applicant's  ability  to  meet  its 
obligaUons  io  connection  with  such  loan. 

(e)  That  the  prospective  earning  power  of  the  applicant  and  the 
chanuiter  and  value  of  the  security  offered  together  afford  reasonable 
assurance  of  the  applicant's  ability  to  repay  the  loan  witiiin  the  time 
fixed  therefor  and  to  meet  its  other  obligations  in  connection  with 
such  loan  and  reasonable  protection  to  the  United  States. 

{d)  That  applicant  is  unable  to  provide  itself  from  other  sources 
with  funds  necessary  for  the  aforesaid  purpose. 

(«)  Tbe  applicant  having  requested,  for  reasons  hereinbefore 
stated,  that  action  on  its  application  for  a  loan  to  aid  it  in  providing 
itself  with  equipment  be  held  temporarily  in  abeyance,  the  Commis- 
aioQ  is  of  the  opinion,  for  the  reasons  given  by  the  applicant,  that  the 
lequKt  should  be  granted,  and  so  finds. 

An  appropriate  certificate  will  be  issued. 

»i.c.a 


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70  INTEBSTATS   COHMKRCS  COMMISSIOK  REPOEtTS. 

CerHfioat*  No.  11  for  a  Loan  under  Section  SIO  of  the  TrantportaUtm 
Act,  l&eo,  at  Amended. 

The  Interstate  Commerce  Commisaioii  certifies  to  the  Secretary  of 
the  Treasury: 

1.  That  the  making  of  a  loan  of  $200^  by  the  United  States  to  tha 
Atlanta,  Birmingham  &  Atlantic  Railway  Company,  hereinafter 
referred  to  as  the  applicant,  for  the  purpose  of  enabling  the  applicant 
to  pay  in  part  its  short-term  loan  held  by  the  National  Bank  of  Com- 
merce, New  York,  and  maturing  July  19, 1920,  is  necessary  to  enable 
the  applicant  properly  to  meet  Uie  transportation  needs  of  the  puUic. 

2.  That  the  prospective  earning  power  alone  of  the  applicant  does 
not  afford  reasonable  assurance  of  the  applicant's  ability  to  repay 
the  loan  within  the  time  fixed  therefor  and  to  meet  its  other  obliga- 
tions in  connection  with  such  loan. 

3.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  together  afford  reasonable 
assurance  of  the  applicant's  ability  to  repay  the  loan  within  the  time 
fixed  therefor,  and  to  meet  its  other  obligations  in  connection  with 
such  loan,  and  reasonable  protection  to  the  United  States. 

4.  That  the  amount  of  the  loan  which  is  to  be  made  is  $200,000. 

5.  That  the  time  from  the  making  thereof  within  which  the  loaa 
is  to  be  repaid  in  full  is  10  years. 

6.  That  the  terms  and  conditions  of  the  loan,  including  the  security 
to  be  given,  are  as  follows : 

(a)  Prior  to  the  making  of  the  loan  by  the  United  States,  the 
applicant  shall  finance  effectively,  for  a  term  of  not  less  than  one 
year,  at  an  annual  total  cost  to  itself  of  not  exceeding  7  per  cent,  the 
remainder,  $276,000,  of  the  shorl^term  note  of  $475,000,  held  by  ^e 
National  Bank  of  Commerce,  New  York,  and  maturing  July  19, 
1920 ;  said  financing  ^all  be  certified  to  have  been  accomplished  hj 
the  affidavit  of  an  executive  officer  of  the  applicant. 

(b)  The  loan  shall  be  evidenced  by  the  notes  of  tiie  applicant  (10 
in  number),  which  shall  be  for  the  amounts  of  principal,  and  shall 
niature  in  from  1  to  10  years  from  date  thereof,  as  follows: 

Note  No.    1 $20,000;  maturing  U21 

Note  No.    2 20,000;  maturing  Iflza 

Note  No.    8 20,000;  mataring  1828 

Note  No.    4 20.000;  maturing  1924 

Note  No.    5  _ 20,000;  maturing  1925 

Note  No.    6 20.000;  maturing  1926 

Note  No.    7 20,000;  maturing  1827 

Noto  No.    8 20, 000 ;  maturing  1028 

Note  No.    8 20.000;  maturing  1938 

Note  No.  10 20,000;  maturing  19S0 

Said  notes  shall  bear  interest  at  6  per  cent  per  annum,  and  inter- 
est shall  be  payable  semiannnally. 

«BI.o.a 


LOAN  TO   kTLAVTA,  BIRMTKOHAU  «  ATLAimC  BY.  71 

(o)  Aa  ooUatorml  aecasitj  for  the  loui,  the  appUcmnt  shall  deliver 
to  and  pledge  witii  the  Secrataiy  of  the  Treasury  tiie  following  bonds 
of  applicant's  issue:  (1)  First  and  refunding  mortgage  gold  bonds, 
dated  November  1,  1919,  due  November  1,  194E>,  in  the  par  value 
of  $SM/)00,  and  (2)  10-year  C  per  cent  income  mortgage  gold  bonds, 
dated  Kovember  1,  1915,  due  November  1,  1980,  in  the  par  value 
of  $400,000. 

(d)  The  applicant  may  pay  off  at  any  time  all  or  any  numbw  of 
the  notes,  with  accrued  interest,  prior  to  maturity  thereof. 

(«)  Ab  the  af<Hreaaid  payments  of  principal  and  aocrued  interest 
shall  be  made,  there  shall  be  released  and  surrendered  to  the  appli- 
cant a  proportionate  share  of  the  aforesaid  collateral  security.  The 
applicant  shall  agree,  on  demand  of  the  Secretary  of  the  Treasury, 
with  the  concurrence  of  the  Interstate  Commerce  CcMnmission,  to 
depodt  with  him  such  additional  security  as  he  may  from  time  to 
time  reqnije,  and  shall  further  agree  that  the  securities  pledged,  to- 
gether with  any  that  may  be  pledged  hereafter  or  may  have  been 
pledged  heretofore,  as  security  for  this  loan  or  any  other  obligation 
of  the  said  applicant  to  the  United  States,  shall  be  applicable  in  like 
manner  to  secure  the  payment  of  any  and  all  sucb  loans  and  ad- 
vances. 

7.  That  the  prospective  earning  power,  alone,  of  the  applicant 
does  not  furnish,  in  the  opinion  of  the  Commission,  reasonable  as- 
surance of  the  applicant's  ability  to  repay  the  loan  within  the  time 
fixed  thereftH*,  and  reasonable  protection  to  the  United  States,  but, 

8.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish,  in  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor  and  reason- 
able protection  to  the  United  States;  and 

9.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  imable 
to  provide  iteelf  from  other  sources  with  the  funds  necessary  for 
the  aforesaid  purposes. 

D«ke  at  Washington,  D.  C,  this  19th  day  of  July,  1920. 

65i.aa 


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IHTBBSIATS  OOMUEBOS  OOUUISSION  BEFDBTS. 


Finance  Docket  No.  984 
IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  CEN- 
TRAL OF  GEORGIA  RAILWAY  COMPANY  FOR  A  LOAN 
FROM  THE  UNITED  STATES  TO  AID  IN  PROVIDING 

NEW  EQUIPMENT. 


Submitted  Jvtv  7,  J9S0.    DeolOed  July  tl,  19E0. 


Application  sranted  and  loan  of  1815,000  approved. 
A.  B.  Lawton  for  applicant. 

Repobt  of  the  Cohhusiom. 
Division  4,  CoMMissioNEita  Met£b,  Daniels,  and  Eabtman. 
Bt  Division  4 : 

The  Central  of  Georgia  Railway  Company,  a  carrier  by  railroad 
subject  to  the  interstate  commerce  act,  made  on  May  31,  1920,  its 
original,  and  on  June  16, 1920,  its  amended,  application  to  the  Com- 
mission for  a  loan  from  the  United  States,  in  accordance  with  sec- 
tion 210  of  the  transportation  act,  1920,  as  amended,  to  provide  itself 
with  equipment. 
Id  said  application  the  applicant  sets  forth : 

1.  That  the  amount  of  the  loan  desired  is  $816,000. 

2.  That  the  time  for  which  the  loan  is  desired  is  15  years. 
8.  That  the  purposes  of  the  loan  are  to  purchase — 


100  iteel-naderframe  stock  c 


0  steel-underframe  ventilated  box  cars 


200  steel-nnderframe  composite  gondolas 660,000 

T  monDtaia-type  freight  and  passenger  locomotives . 4TC,000 

Total  cost 2.  T85, 000 

4.  That  the  use  to  which  the  loan  will  be  applied  is  to  assist  th« 
applicant  in  financing  the  purchase  of  the  above  equipment  as  fol- 
lows: 

One-fourth  the  cost  of — 

100  iteel-nnderframe  stock  cars tSOO.ODU 

600  Bteel-nnderframe  ventilated  t>ox  cars 1,000,000 

200  steel-nnderframe  composite  gondolas SOO.OOO 

Total  coat  of  frel^t  cars 2,810,000 

One-fonrth  equals _. 077,800 

One-balf  tbe  cott  of— 

7  mountaln-t^pe  freight  and  passenger  locomotives . .      470,000 

One-half  equals 287, 900 


LOAH  TO  OBNTBAIj  OF  OBORGU.  RT.  73 

6.  That  the  present  and  prospectire  abilit;  of  the  applicant  to  re- 
pay the  loan  and  meet  the  requirements  of  its  (^ligations  in  that  re- 
gaxd  is  set  forth  in  the  statistical  tables  filed  with  its  application,  and 
the  additional  evidence  furnished  in  its  amended  application  of 
June  18,  1920. 

6.  That  as  to  security  offered  "Applicant  offers  as  security  a 
lien  on  the  new  equipment  second  only  to  a  first  lien  to  be  carried 
by  the  equipment  trust  for  a  portion  of  the  cost,  and  offers  to  re- 
pay the  amount  loaned  by  the  Commission  in  equal  semiannual  in- 
stallments wiUi  semiannual  interest  payments  on  the  whole  amount 
unpaid;  theee  installments  to  cover  the  same  period  of  time  and 
to  mature  at  the  same  time  as  the  installments  of  principal  and  in- 
terest to  be  due  under  the  equipment  trust,  estimated  at  30  semi- 
annual installments  extending  over  a  period  of  15  years." 

7.  That  the  public  convenience  and  necessity  will  bo  served  by 
the  loan  because  (a)  the  shortage  of  cars  on  applicant's  railroad 
is  a  daily  occurrence.  Increase  in  the  weight  of  trains  makes  neces- 
sary the  additioQ  of  seven  mountain-type  locomotives  to  the  three 
owned  by  the  applicant  The  applicant  is  not  adequately  supplied 
with  freight  cars.  Because  of  long  absence  from  home,  an  abnor- 
mally large  number  of  its  freight  cars  are  in  bad  order;  and  (b) 
continuing  increase  in  transportation  in  all  the  territory  served  by 
the  applicant,  and  the  prosperity  of  large  parts  of  the  territory  it 
serves  being  wholly  dependent  on  the  proper  handling  of  peak  loads 
of  the  Georgia  fruit  traffic. 

Said  applications  were  accompanied  by  such  facts  as  the  Com- 
mission required  with  respect  to  the  physical  situation,  ownership, 
capitalization,  indebtedness,  contract  obligations,  operation,  and 
earning  power  of  the  applicant,  together  with  such  other  facts  re- 
lating to  the  propriety  and  expediency  of  granting  the  loan  ap- 
plied for  and  the  ability  of  the  applicant  to  make  good  the  obliga- 
tion as  the  Commission  deemed  pertinent  to  the  inquiry. 

After  investigation,  the  Commission  finds  that  the  making  in 
whole  by  the  United  States  of  the  proposed  loan  of  $815,000  for 
the  aforesaid  purpose  is  necessary  in  order  to  enable  the  applicant 
properly  to  meet  the  transportation  needs  of  the  public;  that  the 
prospective  earning  power  of  the  applicant  and  the  character  and 
value  of  the  security  offered  afford  reasonable  assurance  of  the 
applicant's  ability  to  repay  the  loan  within  the  time  fixed  there- 
for, and  to  meet  its  other  obligations  in  connection  with  such  loan, 
and  reasonable  protection  to  the  United  States ;  and  that  the  appli- 
cant is  unable  to  provide  itself  with  funds  necessary  for  aforesaid 
purposes  from  other  sources. 

An  appropriate  certificate  will  be  issued. 
85 1,  c.  a 

D,=;,lz...,C00gIC 


74  INTERSTATE  OOUUBKCE  OOHMISSION  KBPOBTS. 

Certificate  No.  12  for  a  Loaa^  under  Section  BIO  of  the  Transportation 
Act,  1990,  at  Amended. 

The  Interstate  Commerce  Commission  certifies  to  the  Secretary  of 
the  Treasury  its  findings : 

1.  That  the  making  of  a  loan  of  $815,000  by  the  United  States  to 
the  Central  of  Georgia  Railway  Company,  hereinafter  referred  to 
as  the  applicant,  for  the  purpose  of  providing  the  applicant  with 
equipment,  is  necessary  to  enable  the  applicant  properly  to  meet  the 
transportation  needs  of  the  public. 

2.  That  the  prospective  earning  power  of  tiie  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  fumi^ 
reasonable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor  and  to  meet  its  otlier  obligations  in 
connection  with  such  loan. 

3.  That  the  amount  of  the  loan  which  is  to  be  made  is  $815,000. 

4.  That  the  time  from  the  making  thereof,  within  which  the  loan 
is  to  be  repaid,  is  IS  years,  installments  to  be  paid  as  hereinafter 
indicated. 

5.  That  the  terms  and  conditions  of  the  loan,  including  the  security 
to  be  given  for  payment,  are  as  follows:  The  loan  is  to  be  evidenced 
by  applicant's  30  notes,  of  even  date  witJi  the  making  of  the  loan, 
with  interest  at  the  rate  of  6  per  cent  per  annum,  payable  semi- 
annually. These  notes  are  to  be  secured  by  a  second  lien  on  the 
equipment  subordinate  only  to  the  first  lien  on  the  same  equipment 
to  secure  equipment  note  for  the  balance  of  the  purchase  price  to 
be  sold  or  offered  to  the  public.  The  notes  given  to  the  United 
States  or  equipment  notes  deposited  as  collateral  security  therefor 
to  be  secured  by  the  same  equipment-trust  indenture  or  agreement  of 
conditional  sale  by  which  the  said  equipment  notes  to  be  sold  or 
offered  to  the  public  are  secured,  title  to  the  equipment  not  to  pass 
to  applicant,  nor  from  the  trustee  for  the  ben(^t  of  the  United 
States,  until  the  loan  from  the  United  States  has  been  paid  in  full 
and  applicant  had  fulfilled  all  its  obligations  in  regard  Uiereto.  The 
loan  from  the  United  States  to  be  furUier  secured  by  the  pledge  of 
(a)  bonds,  Ocean  Steamship  Company  of  Savannah,  $11,000;  (&) 
bonds,  United  States,  1917  first  Hber^  loan,  $65,200,  United  States 
1917  second  liber^  loan,  $54,450,  and  United  States  1918  fourth 
liberty  loan,  $100,000,  and  by  (c)  the  indorsement  of  the  gov- 
ernment notes,  or  of  the  equipment  notes  supporting  the  govern- 
ment notes,  by  the  Illinois  Central  Railroad  Company,  as  surety. 
(d)  The  amount  to  be  financed  by  the  applicant  in  connection  wititt 
the  loan  shall  be  so  financed  that  the  cost  to  the  applicant  of  any 
loans  secured  from  Bourcet  other  than  the  United  States  shall  not 

«I.C.C.' 


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LOAN   TO  CENTBAL  OF  GEOROIA  RT.  76 

exceed  7  per  c«nt  per  annuin,  including  in  such  cost  diecounts,  iittor- 
neys'  fees,  and  ao;  and  all  other  expenses  in  connection  therewith. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish,  in  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  6xed  therefor,  and  reason- 
able protection  to  the  United  Statea 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  itself  with  funds  necessary  for  the  aforesaid  purposes  ^m 
other  sources. 

Done  at  Washington,  D.  C,  this  21st  day  of  July,  1920. 

65 1.  C.  C. 


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IKTBBSTA.ia  OOMHEBOa  COtUUSSION  SBPOBTS. 


FiNANce  Docket  No.  17. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  ATCHI- 
SON, TOPEKA  A  SANTA  FE  RAILWAY  COMPANY  FOR 
AUTHORITY  TO  CONTINUE  TO  ISSUE  STOCK  IN  EX- 
CHANGE FOR  CONVERTIBLE  BONDS. 

Bubmitted  July  Tt,  1920.    Decided  Julv  tS.  19B0. 

Antborlty  granted  as  of  JnDe  28,  1920,  to  lasue  common  capital  stock  In  ex> 
obaoge  for  and  against  tbe  surrender  and  cancellation  of  an  eqnal  unount 
in  par  value  of  SO-jear  4  per  cent  convertible  gold  bonds  in  accordance 
with  the  terms  of  a  certain  lndentur«  dated  June  1, 1910. 

S.  T.  Bledsoe  for  applicant. 

Report  and  Ordbb  of  the  Commibbion. 
Division  4,  Comhibsionebs  Meter,  Daniels,  Eastman,  and  Ponvs. 
Bt  Divibign  4 :  ■ 

It  appearing.  That  the  Atchison,  Topeka  and  Santa  Fe  Railway 
Company  has  petitioned  this  Commission  for  authority  under  sec- 
tion 20a  of  the  interstate  commerce  act  to  continue  the  issue  of  its 
common  capital  stock  in  an  additional  amount,  which  shall  not  exceed 
$9,243,000  par  value,  in  exchange  for  and  against  the  surrender  and 
cancellation  of  an  equal  amount  in  par  value  of  its  60-year  4  per 
cent  convertible  gold  bonds,  issue  of  1910,  in  accordance  with  the 
terms  of  an  indenture  dated  June  1,  1910,  under  which  said  bonds 
were  issued  \  and  full  investigation  of  the  matters  and  facts  therein 
involved  having  been  had ;  and  it  further  appearing  that  under  the 
terms  of  said  indenture  the  entire  bond  issue  thereunder  will  be- 
come due  and  payable  on  default  of  said  exchange  on  demand;  and 
it  further  appearing  that  notice  of  said  petition  has  been  given  to 
and  copy  thereof  filed  with  the  governor  of  each  state  in  which  said 
carrier  operates,  as  provided  in  aforesaid  section;  and  the  Commis- 
sion, after  due  consideration  of  all  the  evidence  submitted,  being  of 
the  opinion  that  said  petition  should  be  allowed : 

It  u  ordered.  That  the  Atchison,  Topeka  &  Santa  Fe  Railway  Cc«d- 
pany  be,  and  it  is  hereby,  authorized  to  continue,  in  accordance  with 
and  pursuant  to  the  terms  of  said  indenture  dated  June  1,  1910,  be- 
tween petitioner  and  the  Guaranty  Trust  Company  of  New  York, 
trufit«e,  a  true  copy  of  which  is  on  file  in  this  proceeding,  the  issue  of 

03 1.  c.  a 

DMz.d.^Googlc 


STOCK   tSSlTE  OF  ATCHISOK,  lOFEKA  A  SANTA.  TE  BT.  7? 

its  eommon  capital  stock  in  an  additional  amount  not  exceeding 
98,Si8,000  par  value,  out  of  the  remaining  duly  authorized  and  an- 
issned  shares  of  the  136,860  shues,  of  the  aggregate  par  value  of 
H3,686,000,  reserved  for  the  purpose  under  the  aforesaid  indenture 
dated  June  1,  1910,  in  exchange  for  and  against  the  surrender  and 
cancellation  of  an  equal  amount  in  par  value  per  share  at  the  time 
of  conversion  of  its  SO-year  4  per  cent  convertible  gold  bonds,  issue 
of  1910,  at  any  time  before  Jiuie  1, 1923,  but  not  later,  or,  if  before 
that  date  said  bonds  at  the  time  outstanding  are  called  for  redemp- 
tion as  provided  in  said  indenture,  then  one  day  prior  to  the  redemp* 
tion  date. 

It  u  further  ordered.  That  all  of  said  common  capital  stock  re- 
served but  not  issued  by  midnight  of  May  81,  1928,  as  provided  in 
the  indenture  dated  June  1, 1910.  shall  be  issued  or  disposed  of  only 
on  order  from  this  Commissiim. 

And  it  is  further  ordered,  That  this  order  take  effect  on  the  28th 
day  of  June,  A.  T).  1920,  and  continue  in  force  until  otherwise  or- 
dered or  amended  by  the  Commission. 

65I.C.a 


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INTEBfiTATX   OOUMBBCE  COUIUSSIOK  BEP0BI8. 


FnrANCT  DooER  No.  965. 
IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  GREAT 
NORTHERN  RAILWAY  COMPANY  FOR  A  LOAN  FROM 
THE  UNITED  STATES  TO  MEET  MATURING  INDEBT- 
EDNESS AND  TO  PROVIDE  EQUIPMENT  AND  OTHER 
ADDITIONS  AND  BETTERMENTS. 


BubmittM  JwM  tj,  IStO.    DeoU«d  Julv  £8, 1920. 


ApplicatlOD  iTkDted  !■  part  and  loan  of  $njilQfiOO  appntvad. 

E.  C.  Lindlej/  for  applicuit 

Report  of  thb  Cohhissiom. 
Division  4:  Commisbionerb  Meter,  Daniels,  Eastman,  akd  Pottel 
Bt  Division  4: 

The  Great  Northern  Railway  Company,  a  carrier  by  railroad,  sub- 
ject to  the  interstate  commerce  act,  hereinafter  referred  to  as  the 
applicant,  on  May  22,  1920,  made  application  to  the  Interstate  Com- 
merce Commission  for  a  loan  from  the  United  States  in  accordance 
with  section  210  of  the  transportation  act,  1920,  to  meet  ite  maturing 
indebtedness  and  to  provide  itself  with  equipment  and  oUier  addi- 
tions and  hetterment«;  and  on  June  ^1,  1920,  it  filed  with  the  Com- 
mission a  supplemental  application,  pursuant  to  the  Commission's 
annount^meut  of  June  7,  1920,  of  tiie  general  principles  by  which 
it  would  be  governed  in  administering  the  fund  created  by  said 
section  of  the  act. 

In  the  application,  as  supplemented,  the  carrier  sets  forth : 

1.  That  the  amount  of  the  loan  desired  is  $28,000,000. 

2.  That  tJie  term  for  which  it  is  desired  is  15  years. 

3.  That  the  proposed  loan  is  to  provide  for  the  purchase  of  new 
equipment  and  other  additions  and  betterments  and  the  retirement 
of  maturing  obligations  as  follows: 

46  heaT7  mikado  locomotives,  at  f60,000  each (2, 760, 000 

1,000  TS-ton  ore  cars,  at  $2,550  each 2,6M,000 

StrenEtbeninK  €3tlBUiig  eqalpment 200,000 

Other  additions  and  bettermente 2,870,000 

Hataiitles  (3-rear  coUateral-trust  gold  not«a  matnrlns  Sept  1, 1020).  20, 000, 000 

Unltemlzed 130,000 

Total 28, 000, 000 

4.  'Hat  the  use  to  which  the  loan  will  be  applied  is  the  financing 
of  the  purchase  of  the  aforesaid  new  equipment,  the  making  of  the 
aforesaid  additions  and  betterments,  and  the  retirement  of  the  afore- 
said maturitie*.  45 1.  u.  a 


LOAB   TO  EFREAT  NOBTHBIUT  RT. 


79 


9.  Its  pneMit  uid  proapsettre  ability  to  repay  th«  loan  and  meat 
thfl  reqniremente  of  its  tjhhgKtitam  in  that  regard. 

ft.  That  tha  nenrity  offered  is  such  portion  aa  is  neceasaiy,  bat  not 
exceeding  125  per  cent,  of  the  amonnt  loajied  of  the  applicanfa  first 
and  refunding  4|  per  cent  gold  bonds. 

7.  That  wiUiout  the  additional  equipment  to  be  bought  and  with- 
out the  other  additions  and  betterments  proposed  and  without  the 
maintenance  of  its  credit  by  the  prompt  reUrement  of  the  matarities 
referred  to,  the  applicant  will  be  unaUe  to  meet  the  demands  on  it 
for  freight  transportation,  and  to  the  extent  that  the  loan  will  fur- 
nish neoeeaary  aid  in  supplying  its  needs,  the  public  oonv^ence  and 
necessity  will  be  served. 

Said  Implication  was  accompanied  l^  such  facta  and  details  as  the 
Commission  required  with  raQ>ect  to  the  physical  situation,  owner- 
^p,  capitalisation,  indebtedness,  contract  obligations,  operation,  and 
earning  power  of  the  applicant,  t<^ether  with  sach  other  facte  re- 
lating to  the  propriety  and  expediency  of  granting  the  loan  applied 
for  and  the  ability  of  the  applicant  to  make  good  the  diligation  as 
the  Commission  deemed  pertinent  to  the  inqairy. 

The  Assodatioii  of  Railway  Executives  recommended  that  a  loan 
be  made  to  the  applicant  of  $lfi76fi00  for  the  purchase  of  freight 
and  switching  locomotives,  $637,000  for  the  purchase  of  freight-train 
cars,  and  $1,550,060  for  additions  and  betterments  to  promote  the 
movement  of  freight  cars. 

After  investigation,  the  Commission  finds  that  the  proposed  loan 
should  be  made  in  part,  as  follows : 


PonAaw  oTU  l»Tr  ituidard  mlbdo  looomMlvn 

PufDluu  ol  IfiM  TS-toD  tuvptr-bottom  stMl  an  can,  witk  <iiUGk.danv>iiit 

am™ 

ToUI  Ax  nnr  tqulpmrat 

Olbv  addttMu  BDd  bMtariBCDU: 

CottuMfarboastncaDplarcMatWUMAibfllant 

CarnultibaililnUwiUMDlNnthDikoto 

Addltfoul  Tird  tncki  it  AU<iU«h  Wis.,  ud  EUlTart,  Wufa.,  uid  oUur 
nlaoBnumitt  puttniud  lUtta  tncki  OMdad  to  nlhr*  can(Htloti 
*hlcb  dalsTi  tnllhi 

Addilloottl  or  lmpniT«d  water  nip|dr  tt  navto,  Hint.,  isd  mlwJIatituM 
potnti  wlwn  ntcMW fy  to  ndooo  M*r«  teddant  to  Inadeqaat*  wum 

Oiaptaddbics iiid  took  *t  WhltaBib,  iiont.,  anctiM  termiiul, utd  «■■» 
wbcro  wlwn  BgotaMy  to  fodlmta  Bm  holiJIlni  StB^Brn  or  otMr  nOhif 

Total  lor  ftddltiootudlwttwnHDti 

HMtnlni  Indabtodnns: 

Onot  Northtm  IUili»T  Ccmpaaj'a 

Tot»l  Kr  nutmltlB 

Total  lor  an  pnrpOM*. 

66 1,  c.  a 


t3,in,tm 

2,fn,0M 


we,  OOP 
iM,<)ao 


we,  ago 


80  INTEBSTATE  COUHBBCE  COHUISSION  KEPOBTB. 

The  toED  of  $16,000,000  to  aid  in  meeting  ntatuiing  indebtedness  is 
made  in  view  of  the  fact  that,  in  addition  to  the  indebtedness  of 
approximately  $20,000,000  falling  dne  in  1920,  the  applicant  will  be  re- 
quired to  finance  its  part  of  the  Great  Northern- Northern  Pacific  joiirt 
48,  maturing  July  1, 1921,  in  the  aggregate  sum  of  about  $214,000,000. 
The  loan  of  $16,000,000  recommended  in  this  respect  is  to  be  repaid 
in  one  year  from  the  time  of  the  making  thereof  and  not  later  than 
September  1,  1921,  and  will  therefore  be  available  to  meet  the 
demands  of  othor  carriers  for  loans  before  the  expiration  of  the 
period  provided  by  law  for  the  disbursement  of  the  revolTing  fund. 
The  mi^ng  of  this  loan  of  $16,000,000  for  the  purpose  and  period 
indicated  is  recommended  by  the  Association  of  Railway  BxecDti'vee. 

The  Commission  further  finds  that  the  loan  by  the  United  States 
for  the  aforesaid  purposes  ia  necessary  in  order  to  enable  the  appli- 
cant properly  to  meet  the  b-ansportation  needs  of  the  public ;  that 
the  prospective  earning  power  of  the  applicant  and  character  and 
value  of  the  security  offered  afford  reasonable  assurance  of  the  appli- 
cant's ability  to  repay  the  loan  within  the  time  fixed  therefor,  and 
to  meet  its  other  obligationB  in  connection  with  sik^  loan,  and  reason- 
able protection  to  the  United  States ;  and  that  the  applicant  is  unable 
to  provide  itself  with  funds  necessary  for  tiie  aforesaid  purpoeeB 
from  other  scmrces. 

An  appropriate  certificate  will  be  issued. 


CerHficaie  No.  IS  for  a  Loan  under  Section  £10  of  the  Traneportation 
Acty  19e0y  as  Amended. 

The  Interstate  Commerce  Commission  certifies  to  the  Secretary 
of  the  Treasury  its  findings : 

1.  That  the  making  of  a  loan  of  $17,910,000  by  the  United  States 
to  tibe  Qreat  Northern  Bailway  Company,  hereinafter  referred  to  as 
the  applicant,  to  aid  in  meeting  its  maturing  indebtedness,  consist- 
ing  of  its  three-year  coUateral-toiist  notes  due  September  1,  1920, 
and  for  the  purpose  of  providing  it  with  equipment  and  other  addi- 
tions and  betterments,  is  necessary  to  enable  Ute  applicant  properly 
to  meet  the  transportation  needs  of  the  public 

2.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  securi^  offered  are  such  as  to  furnish 
reasonable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor  and  to  meet  its  other  obligations  in  con- 
nection with  such  loan. 

3.  That  the  amount  of  the  loan  which  is  to  be  made  is  $17,910,000. 

65 1,  a  a 


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LOAN   TO  GREAT   NOBTHEBN  RT.  81 

4.  That  the  time  frwQ  the  mnbing  thereof  within  which  the  loan 
is  to  be  repaid  in  full  is  15  years,  installments  to  be  paid  as  hereinaAw 
indicated. 

6.  That  the  terms  and  conditions  of  the  loan,  including  the  security 
to  be'givea  for  payment,  are  as  follows.  The  loan  is  to  be  divided 
into  three  parts: 

(1)  One  part  to  Bid  Id  the  pnrchsBe  of  locomotives  and  cars $2, 010,  000 

ib)  One  part  to  Hid  In  atrengthenlng  existing  equipment,  CIOO.OOO; 

and  for  otber  addltiona  and  bettemiena,  (800,000 000, 000 

(0)  One  part  to  aid  In  meeting  maturing  Indebtedness 15,000,000 

Totol 17, 010, 000 

That  part  of  the  loan  to  aid  in  t^e  purchase  of  equipment  (item  a) 
is  to  be  evidenced  by  the  applicant's  fifteen  notes  for  $134,000 
each,  payable,  respectively,  in  1,  2,  a,  4,  6,  6,  7,  8,  9,  10,  11, 
12,  13,  14,  and  15  years  from  the  making  of  said  part  of  the  loan, 
with  intereet  at  the  rate  of  6  per  cent  per  annum,  payable  semi- 
annually. These  notes  are  to  be  secured  by  a  second  Hen  on  the 
equipment  subordinate  only  to  the  firrt  lien  on  the  same  equipment 
to  secure  equipment  notes  for  the  balance  of  purchase  price  to  be  sold 
or  offered  to  the  public.  The  notes  given  to  the  United  States  or 
equipment  notes  d^>08ited  as  collateral  security  therefor  shall  be  se- 
cured fay  the  same  equiiunent-tmst  indenture  or  agreement  of  con- 
ditional sale  by  which  the  said  equipment  notes  to  be  sold  or  offered 
to  the  public  are  secured.  Title  to  the  equipment  ^all  not  pass  to 
the  applicant,  nor  from  the  trustee  for  the  benefit  of  the  United 
States,  until  the  loan  from  the  Umted  States  has  been  paid  in  full 
and  applicant  has  fulfilled  all  its  obligations  in  regard  thereto. 

That  part  of  the  loan  to  aid  in  the  making  of  additions  and  better- 
ments (item  b)  is  to  evidenced  by  the  applicant's  four  notes  for 
$225,000  each,  payable  respectively  in  three,  four,  five,  4nd  six  years 
from  the  making  of  this  part  of  the  loan,  with  interest  at  the  rate  of 
6  per  cent  per  annum,  payable  semiannually. 

That  part  of  the  loan  to  aid  in  meeting  maturing  inddstednea 
(item  c)  is  to  be  evidenced  by  the  applicant's  note  for  $15,000,000^ 
payable  not  more  than  one  year  from  the  making  of  this  part  of  the 
loan  and  not  later  than  September  1, 1921,  with  interest  at  the  rate  of 
6  per  cent  per  annum,  payable  semiannually. 

All  of  said  loans  are  to  be  further  secured  by  the  pledge  as  collat- 
eral security  of  a  total  of  $22,387,000  par  value  of  Great  Xorthem 
Railway  Company  first  and  refunding  mortgage  50-yeaT  4}  per 
cent  bonds  due  July  1,  1961,  now  held  in  the  applicant's  treasury. 
The  bonds  pledged  as  collateral  security  shall  be  released  propor- 
tiooately  as  installmenta  are  paid. 


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82  IlfTERSTATE  COUUBBCE  COMMISSION  BBPOBTS. 

The  applicant  shall  have  the  privilege  of  paying  any  or  all  install- 
ments or  any  or  all  parts  of  the  loan,  with  accrued  intereet,  at  any 
time  before  maturity. 

As  further  oonditions  precedent  to  the  making  of  the  loan^  th« 
applicant  shall  agree  (1)  on  demand  of  the  Secretary  of  the  Treas- 
ury, with  the  concurrence  of  the  Interstate  Commerce  Commission,  to 
deposit  with  him  such  additional  security  as  he  may  from  time  to 
time  require,  and  shall  further  agree  that  the  securities  pledged, 
together  with  any  that  may  be  pledged  hereafter  or  may  have  been 
pledged  heretofore,  as  security  for  this  loan  or  any  other  obligation 
of  the  said  applicant  to  the  United  States  shall  be  applicable  in  like 
manner  to  secure  the  payment  of  any  and  all  such  loans  and  ad- 
vances; (2)  to  furnish  on  or  about  January  1  and  July  1,  1921,  the 
detailed  certificate,  under  oath  of  its  chief  engineer,  of  the  additions 
and  betterments  made  with  or  in  connection  with  the  funds  provided 
by  this  loan  for  said  purposes.  In  event  any  part  of  this  loan  for 
additions  and  betterments  shall  not  have  been  expended  or  definitely 
obligated  for  the  purposes  for  which  loaned  on  or  before  July  1, 
19S1,  the  Secretary  of  the  Treasury  may  declare  such  unexpended 
portion  due  and  payable  at  once;  (3)  that  the  amount  to  be  financed 
by  the  applicant  in  connection  with  the  loan  shall  be  so  financed  that 
the  cost  to  the  applicant  of  any  loans  secured  from  sources  other  than 
the  United  States  government  shall  not  exceed  7  per  cent  per  annum, 
including  in  such  cost  discount,  attorneys'  fees,  and  any  and  all 
other  expenses  in  connection  therewith ;  (4)  that  no  part  of  said  loan 
for  additions  and  betterments  shall  be  used  for  purposes  which  under 
the  accounting  regulations  of  the  Commission  might  or  would  be 
chaigeabie  to  accounts  other  than  those  prescribed  in  the  present 
classification  of  investment  in  road  and  equipment  of  steam  roads; 
and  (6)  the  applicant  shall  apply  for  a  loan  in  respect  of  and  shall 
agree  to  construct  or  purchase  500  refrigerator  cars,  one-toarth  of 
the  cost  of  which  shall  be  financed  by  a  loan  from  the  United  States 
and  three- fourths  of  the  cost  of  which  shall  be  financed  by  the  ap< 
plicant. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  charad:er  and  value  of  the  security  offered,  furnish,  in  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant^ 
ability  to  repay  the  loan  within  the  time  fixed  therefor  and  reason- 
able protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  itself  with  the  funds  necessary  for  the  aforesaid  purposes 
fnnn  other  sources,  except  at  excessive  rates  of  int«esL 

Done  at  Wa^ington.  D.  C,  this  28th  day  of  July,  1920. 

W1.C.C. 


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HOIS  ASD  BOHD  U8UB  OF  WE8TKBN  UABTLAKD  BT. 


Finance  Dockbt  No.  16. 

IN  THE  MATTEB  OF  THE  APPLICATION  OF  THE  WEST- 
ERN MARYLAND  RAILWAY  COMPANY  FOR  AUTHOR- 
ITY TO  ISSUE  NOTES  AND  TO  ISSUE  AND  PLEDGE 
BONDS. 


8»bmitt«d  Jvly  U,  19tO.    DtcU^  /wly  »,  IBSO. 


Aiithorttj  smited  (1)  to  Ibsim  f5,800,000  of  tbreft-year  S  per  cent  Ewured  gold 
notes,  and  (2>  to  imae  $8,700,000  of  flnt  nnd  refandlng  mortsBge  5  por 
cent  bnnds  as  collntenl  Mcutitj'  for  nid  tbrec-rear  8  per  cent  wcarod 
pAd  Qotes  and  convertible  therefor. 

Lmprence  Greer  and  Louia  F.  TimmMtnan  iae  applicant. 
Report  ano  Ordbb  or  thk  Commission. 
Division  4,  CoKHissioNBitB  Mxtbb,  Danieu,  Eastman,  and  Pormt. 
Bt  DmaioN  4 : 

It  appearing.  That  the  Western  Maryland  Railway  Company  has 
applieil  to  thia  Omamiesion,  onder  section  20a  of  the  interstate 
cosunerce  act,  for  an  order  anthorizing  it  to  issue  its  three- 
year  6  per  oent  secured  gold  notes  in  a  principal  amount  of  $5,800,- 
000,  to  be  dated  August  1,  1920,  and  to  mature  on  August  1,  1923, 
■ad  also  for  an  ac^vt  autfaoriiing  it  to  issue  \ta  first  and  refunding 
5  per  cent  mortgage  bonds  in  a  principal  amount  of  $8,700,000,  dated 
July  1,  1917,  to  mature  July  1,  1967,  and  to  deposit  and  pledge  such 
first  and  refunding  mortgage  bonds  as  collateral  eecnrity  for  said 
$6,800,000  seoured  notas  under  a  trust  indenture  to  be  executed  by 
said  Westwn  Maryland  Bailiray  CcHnpany  to  Vtit>  Bankers  Trust 
C«mpany  (of  New  York),  to  be  dated  August  1,  1920;  and 

It  fvrther  appearing,  That  the  application  was  made  in  such  form 
and  contained  such  matters  as  the  Commission  prescribed  and  that 
it  was  made  under  oath,  signed,  and  filed  on  behalf  of  said  carrier 
by  (me  of  its  execaiiTe  officers  having  knowledge  of  the  matters 
therein  set  forth  and  duly  designated  for  that  purpose  by  the  car- 
rier; and 

It  further  appearing,  That  notice  of  the  filing  of  said  application 
has  been  given  to,  and  a  copy  thereof  filed  with,  the  governor  of 
eadi  cAate  in  which  the  applicant  operates,  as  required  by  section  20a. 
and  that  no  objectkni  to  the  issue  by  the  ConunisBion  of  an  order 

«6i.c.a  , 

otigle 


84  rSTERSTATB  COMMERCE  COMMISSION  BEP0BT8. 

granting  the  application  has  been  offered  b;  the  railroad  dxnmts- 
sion,  public  service  or  utilities  commission,  or  other  appropriate 
state  authority  of  any  of  such  states;  and 

It  further  appearing^  That  full  investigation  of  the  mattOTB  and 
things  involved  in  this  proceeding  has  been  had ; 

Held,  That  the  proposed  issues  by  the  Western  Maryland  Railway 
Company  (a)  are  for  a  lawful  object  within  its  corporate  purposes, 
and  compatible  with  the  public  interest,  which  is  necessary  and  ap- 
propriat«  for  and  consistent  with  the  proper  pertonnance  by  it  of 
service  to  the  public  as  a  common  carrier,  and  which  will  not  impair 
its  ability  to  perform  that  service;  and  {b)  are  reasonably  necessary 
and  appropriate  for  such  purpose. 

It  is  therefore  ordered,  That  the  issue  by  the  applicant  of  $5,800,000 
of  three-year  8  per  cent  secured  gold  notes,  to  be  dated  August  1, 1920, 
and  maturing  on  August  1,  19ii3,  bearing  interert  at  the  rate  of  8 
per  cent  per  anniun,  payable  semiannually  on  the  1st  day  of  February 
and  of  August  in  each  year :  and  the  issue  of  $8,700,000  of  its  first 
and  refunding  mortgage  5  per  cent  bonds,  to  bear  date  July  1,  1917, 
maturing  July  1,  1967;  and  the  deposit  and  pledge  of  said  bonds 
under  aforesaid  trust  indenture  to  be  dated  August  1, 1920,  and  to  be 
execnted  by  applicant  to  the  Bankers  Trufit  €V>mpany  (of  New 
York) ,  as  collateral  security  for  the  three-year  8  per  cent  secured  gold 
notes,  all  of  which  is  more  fully  set  forth  in  said  application  as 
amended  and  supplemented,  and  in  said- trust  indentore,  a  true  copy 
of  which  is  on  Ble  in  this  proceeding,  be,  and  they  are  hereby, 
authorized  and  ^proved. 

It  u  further  ordered.  That  upon  the  advertisemeot  of  notice  as 
provided  in  the  trust  indenture,  the  applicant  diall  have  ttie  rig^t 
at  any  time  before  the  maturity  of  said  three-yesr  8  per  cent  seeatvd 
gold  notes  to  redeem  and  pay  off  all,  but  not  any  part,  of  said 
notes  then  outstanding,  by  the  paym«it  of  the  principal  amoant 
thereof,  together  with  accrued  interest  thereon  to  the  date  of  re- 
demption, and  at  any  time  prior  to  ti>e  maturity  of  the  tratos,  or  any 
of  them,  the  holders  thereof  may  have  the  option  to.  exchange  or 
convert  them  into  first  and  refunding  mortgage  bonds  at  the  rate 
of  $1^00,  face  value,  of  first  uid  refunding  mortgage  bonds,  with  all 
onmatured  coup<m8  thereunto  appertaining,  for  each  $780,  face  value, 
of  notes,  with  an  adjustment  of  accrued  interest  as  between  the 
notes  and  bonds  to  the  date  of  the  exchange  or  convemon. 

/*  is  further  ordered.  That  $800,000  par  value  of  said  three-year  8 
per  crat  secured  gold  notes,  or  the  proceeds  thereof,  shall  be  oaed 
for  the  purpose  of  retiring  a  like  amount  of  par  value  of  a  total  of 
$1,000,000  of  &e  first-mortgage  6  per  oeat  bonds  of  the  Coal  A  Tixm 
Bailway  Company  dated  August  i,  1900,  DHturing  August  1,  1990, 

-»i.ao. 


,,  CcHH^Ic 


NOTE  AMD  BOin>  MSUB  OV  TWTBBN  UASJUlSD  BT.  85 

issued  under  e  mortgege  dated  July  3,  1900,  to  Uie  Mercantile  Trust 
ft  Deposit  CtHopan;  of  Baltimore,  as  trustee,  the  payment  of  the 
principal  and  interest  upon  the  last-mentioned  bonds  having  been 
assumed  by  applicant;  and  that  $0,000,000  par  value  of  said  notes, 
or  the  proceeds  thereof,  shall  be  used  for  the  purpose  of  retiring 
a  like  amount  of  par  value  of  three-year  8  per  cent  notes  of  the  appli- 
cant, dated  Kovember  I,  1917,  maturing  November  1,  1990,  issued 
under  a  certain  trast  indeidwn  dated  November  1,  1917,  to  tiie 
Bankers  Trnet  Conqtany  (of  Nevr  Yozk),  as  trustee. 

It  ia  further  ordered^  That  as  a  oondition  precedent  to  the  issue 
of  the  three-year  8  per  cent  secured  gold  notes  in  the  amount  of 
$5,800,000  the  applicant  shall  pay  in  cash  ^00,000  of  the  principal 
of  $1,000^  of  the  first-mortgage  5  per  cent  bonds  of  the  Coal  A 
Iron  Railway  Company  maturing  on  August  1,  1920,  together  with 
all  the  interest  accrued  and  payable  thereon  at  the  time  of  their 
retirement  And  as  a  further  condition,  the  applicant  carrier  shall 
also  pay  in  cash,  on  or  before  November  1, 1920,  the  interest  accrued 
at  the  tdme  of  retirement  of  the  $0,000,000  of  the  three-year  7  per  cent 
notes  maturing  November  1,  1920. 

It  it  further  ordered,  That  this  order  shall  take  effect  on  the  29th 
day  of  July,  1920,  and  continue  in  force  until  otherwise  ordered  by 
this  CtHnmiseion. 

And  it  is  fwrther  ordered.  That  nothing  herein  shall  be  construed 
to  imply  any  guaranty  or  obligation  as  to  said  three-year  8  per  cent 
secured  gtdd  notes  and  said  first  and  refunding  mortgage  bonds,  or 
interest  thereon,  on  the  part  of  the  United  States. 

flSI.G.G 


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tST&B&tiXB  COUUBBOE  OOHIOSSIOS  BSPOBTS. 


Finance  Dockct  No.  1086. 

IN  THE  MATTER  OF  THE  APPUCATION  OF  THE  WEST- 
ERN  MARYLAND  RAILWAY  COMPANY  FOR  A  LOAN 
FROM  THE  UNITED  STATES  TO  AID  IN  MEETING 
MATURING  INDEBTEDNESS  AND  IN  PROVIDING 
EQUIPMENT  AND  OTHER  ADDITIONS  AND  BETTER- 
MENTS. 


Buhmittei  Julv  it,  t9iO.    Deetied  July  t9,  liiiO. 


AppllcatloD  granted  la  part  and  loan  of  |300,000  apprOTed. 
M.  C.  By«Ta  for  applicant. 

Refobt  of  the  Couuisbion. 
DiTiBiON  4,  C0MMIS8IONEBS  Metxb,  Daniels,  and  Eastman. 
Bt  Division  4: 

The  Western  Maryland  Railway  Company,  a  carrier  by  railroad, 
subject  to  tbe  interstate  commerce  act,  hereinafter  referred  to  as  the 
applicant,  on  May  29, 1920,  made  application  to  the  Interstate  Com- 
merce Commission  for  a  loan  from  the  United  States  in  accordance 
with  section  210  of  the  transportation  act,  1920,  and  on  June  Ifi,  1920, 
amended  and  supplemented  its  said  application,  pursuant  to  the 
Commission's  announcement  of  June  7,  1920,  of  the  general  prin- 
ciples by  which  it  would  be  governed  in  administering  the  fund 
created  by  said  section  of  the  said  act.  The  application  was  farther 
amended  and  supplemeoled  July  1  and  22,  1920. 

In  the  application,  as  amended  and  supplemented,  the  carrier  sets 
forth: 

1.  That  the  amount  of  the  loan  desired  is  $1,672,800. 

2.  That  the  term  for  which  the  loan  is  desired  is  15  years. 

3.  That  the  purpose  of  the  loan  is  to  assist  the  applicant  in  pur- 
chasing new  equipment,  providing  itself  with  additions  and  better- 
ments, and  in  meeting  maturities. 

4.  That  the  uses  to  which  the  loan  will  be  applied  are  those  indi- 
cated by  the  purposes  hereinbefore  stated. 

5.  The  present  and  prospective  ability  of  the  applicant  to  repay 
the  loan  and  meet  the  requirements  of  its  obligations  in  that  regard. 

6.  That  the  security  offered  for  the  various  amounts  loaned  is  as 
follows:  For  the  amount  loaned  for  equipment,  a  aeoond  lien  upon 

eeLco. 


LOAN  TO  WBSTEBN  MABYLAND  BY.  87 

(ba  eqnipment  and  applicant's  first  and  refunding  mortgage  bonds; 
for  additions  and  betterments,  first  and  refunding  mortgage  bonds ; 
for  maturities,  the  face  amoimt  of  applicant's  three-year  6  per  cent 
secured  notes  for  the  amount  loaned. 

7.  ITie  extent  to  which  the  public  convenience  and  necessity  will 
be  served  by  the  loan. 

The  application  was  accompanied  by  such  facts  and  details  as  the 
Commission  required  with  respect  to  the  physical  situation,  owner- 
ship, capitalization,  indebtedness,  contract  obligations,  operation, 
ind  earning  power  of  the  applicant,  together  with  such  other  facts 
niating  to  the  propriety  and  expediency  of  granting  the  loan  ap- 
plied for  and  the  ability  of  the  applicant  to  make  good  the  obliga- 
tion as  the  Commission  deemed  pertinent  to  the  inquiry. 

After  investigation,  ^  Commis^on  finds  that  the  making  in  part 
of  the  proposed  loan — $300,000  to  assist  the  applicant  in  providing, 
to  the  extent  of  $800,000,  principal  amount,  for  the  retirement  of 
tl^,000,  principal  amount,  first-mortgage  5  per  cent  bonds  of  the 
Coal  &  Iron  Railway  Company,  due  August  1,  1920,  the  balance  of 
tbe  amount  required,  to  enable  such  retirement  of  $1,000,000,  prin- 
cipal amount  of  said  bonds,  to  be  payable  by  the  applicant  out  of 
its  cash  resources  by  the  United  States  for  the  aforesaid  purposes — is 
necessary  in  order  to  enable  the  applicant  properly  to  meet  the  trans- 
portation needs  of  the  public;  that  the  prospective  earning  power  of 
tlie  applicant,  and  the  character  and  value  of  the  security  offered, 
afford  reasonable  assurance  of  the  applicant's  ability  to  repay  tbe 
loan  within  the  time  fixed  therefor,  and  to  meet  its  other  obligations 
in  connection  with  such  loan,  and  reasonable  protection  to  the  United 
States;  and  that  the  applicant  is  unable  to  provide  itself  from  other 
soorces  with  funds  necessary  for  th.e  aforesaid  purposes. 

The  applicant's  remaining  requirements  for  equipment  and  addi- 
tims  and  betterments,  as  set  forth  in  its  application,  will  have  de- 
ferrad  consideration. 
An  appropriate  certificate  will  be  issued. 


Certifieate  No.  H  for  a  Loan  under  Section  HO  of  the  TrantportaUon 
Act,  19W,  aa  Amended. 

The  Interstate  Commerce  Commission  certifies  to  the  Secretary  of 
the  Treasury  its  findings : 

1.  That  the  making  of  a  loan  of  $800,000  by  the  United  States  to 
the  Western  Maryland  Railway  Company,  hereinafter  referred  to 
uthe  applicant,  for  the  purpose  of  assisting  the  applicant  in  meet- 
ing maturities,  is  necessary  to  enable  the  applicant  properly  to  meet 
'^  transportation  needs  of  the  public. 

»'■<'•"=■  c«,=„,Goo8lc 


88  IKTBR8TATE  COMMEBCE  COUMISSIOH  BBFORTS. 

2.  That  the  prospectiTe  earning  power  of  the  applicant  and  tlM 
character  and  value  of  the  security  offered  are  such  as  to  furtuah 
reasonable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor  and  to  meet  ita  other  obligations  in 
connection  with  such  loan. 

3.  That  the  amount  of  the  loan  which  is  to  be  made  is  $300,000. 

4.  That  the  time  from  the  making  thereof  within  which  the  loan  is 
to  be  repaid  is  three  years. 

6.  That  the  terms  and  conditions  of  the  loan,  including  the  secur- 
ity to  be  given  for  repayment,  are :  The  loon  is  to  be  evidenced  by 
applicant's  note  for  $300,000,  maturing  in  three  years  from  the  date 
thereof.  The  said  note  shall  bear  interest  at  the  rate  of  6  per  cent 
per  annum,  payable  semiannually,  and  shall  be  secured  to  the  United 
States  by  pledge  of  the  following-named  securities,  $300,000,  princi- 
pal amount,  of  Western  Maryland  Railway  Company  three-year  8 
per  cent  secured  notes.  The  applicant  shall  agree,  on  demand  of 
the  Secretary  of  the  Treasury,  with  the  concurrence  of  the  Inter- 
state Commerce  Commission,  to  deposit  with  him  such  additional 
security  as  he  may  from  time  to  time  require,  and  shall  further 
agree  that  the  securities,  together  with  any  that  may  be  pledged 
hereafter,  or  may  have  been  pledged  heretofore,  as  security  for  this 
loan  or  any  other  obligation  of  the  said  applicant  to  the  United 
States,  shall  be  applicable  in  like  manner  to  secure  the  payment  of 
any  and  all  such  loans  and  advances. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
witJi  the  character  and  value  of  the  security  offered,  furnish,  in  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor,  and  rea- 
sonable protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  itself  witb  the  funds  necessary  for  the  aforesaid  purpose 
from  other  sources. 

Done  in  Washington,  D.  C,  tliis  29tt)  day  of  July,  1920. 


Amended  Gertifioata  No.  I4  for  a  Loan  under  Section  SIO  of  tka 
Transportation  Act,  19£0,  as  Amended. 

The  Interstate  Commerce  Commissdon  certifies  to  the  Secretary 
of  the  Treasury  its  findings : 

1.  That  the  making  of  a  loan  of  $800,000  by  the  United  Stotes  to 
the  Western  Maryland  Railway  Company,  hereinafter  referred  to 
aa  the  applicant,  for  the  purpose  of  assisting  the  applicant  in  meet- 
ing maturities,  is  necessary  to  enable  the  applicant  properly  to  meet 
the  transportation  needs  of  the  public. 

,-,      OBLCa 


utAH  TO  mams  habtiahd  kt,  89 

2.  Thit  the  prospective  esnung  pow«r  of  the  applicant  and  Uie 
Aanetat  and  value  of  the  security  offered  are  such  as  to  furnish 
rwsuiable  assnrance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor  and  to  meet  its  other  obligations  in 
cooiteedtHi  with  such  loan. 

5.  That  the  amount  of  the  loan  which  is  to  be  made  is  $300,000. 
4.  That  the  time  from  the  making  thereof  within  which  the  loan 

ii  to  be  repaid  is  three  years. 

&  That  the  terms  and  conditions  of  the  loan,  including  the  secur- 
ity to  be  given  for  repayment,  are  that  the  loan  is  to  be  evidenced 
iy  ^tplicant's  note  for  $300,000,  maturing  in  three  years  from  the 
date  thereof.  The  said  note  sht^  bear  interest  at  the  rate  of  6  per 
cent  per  annum,  payable  semiannually,  and  shall  be  secured  to  the 
United  States  by  pledge  of  t^e  following-named  securities,  $300,000, 
principal  amount,  of  Western  Maryland  Bailway  Company  three- 
Tear  8  per  cent  secured  notes.  The  applicant  shall  agree,  on  demand 
of  the  Secretary  of  the  Treasury,  with  the  concurrence  of  the  Inter- 
Aite  Commerce  Commission,  to  deposit  with  him  such  additional 
aecori^  as  he  may  from  time  to  time  require,  and  shall  further  agree 
that  the  securities  pledged,  together  with  any  that  may  be  pledged 
)WFeaft«r,  or  may  have  been  pledged  heretofore,  as  security  for  this 
loan  or  any  other  obligation  of  the  said  applicant  to  the  United 
States  for  lease  made  under  section  210  of  the  transportation  act, 
1820,  shall  be  applicable  in  like  manner  to  secure  the  payment  of  any 
ind  all  such  loans. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  tiie  security  offered,  furnish,  in  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant's 
^tlity  to  repay  the  loan  within  the  time  fixed  therefor  and  reason- 
■ble  protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  CommiseioD,  is  unable 
to  provide  itself  with  the  funds  necessary  for  the  aforesaid  purpose 
fnon  oihet  aonrcea. 

Done  at  Washington,  D.  C,  this  6th  day  of  August,  1920. 
« I.  c.  c. 


D,=;,lz...,C00gIC 


INTBBSCATE  tiOUlCBBOB  OOHHISSIOH  BBPOBTa. 


FiHANCE  Docket  No.  919, 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  ANN 
AKBOR  RAILROAD  COMPANY  FOR  A  LOAN  FROM  THE 
UNITED  STATES  TO  AID  IN  ACQUIRING  LOCOMOTIVES. 


Btibmltted  Jvip  IS,  1920.    Decided  Aufftut  3.  19tO. 


.    AppUcatlw)  gnuited  niMI  a  loan  of  $86,000  approved. 
Jfetoman  Erb  for  applicant. 

Refobt  of  the  Coumlbsion. 

Division  4,  Coumissionbss  Meter,  Daniels,  and  Eastmatt. 
Bt  Division  4: 

Th«  Ann  Arbor  Railroad  Company,  a  carrier  by  railroad  subject 
to  the  interstate  commerce  act,  hereinafter  referred  to  as  the  appli- 
cant, on  July  13, 1920,  made  applicatioD  to  ^e  Interstate  Commerce 
Commission  for  a  loan  from  the  United  States  in  accordance  with 
section  210  of  the  transportation  act,  as  amended. 

In  said  application  said  carrier  sets  forth : 

1.  That  the  amount  of  the  loan  desired  is  $35,000. 

2.  That  the  term  for  which  the  loan  is  desired  is  five  years. 

3.  That  the  purpose  of  the  loan  is  to  assist  applicant  in  acquiring 
three  switching  locomotives  by  loaning  it  80  per  cent  of  the  cost  of 
the  proposed  locomotives,  said  cost  being  approximately  $116,775. 

4.  Hiat  the  use  to  which  the  loan  will  be  applied  is  as  hereinbefore 
stated. 

6.  Its  present  and  prospective  ability  to  repay  the  loan  and  meet 
the  requirements  of  its  obligations  in  that  regard. 

6.  That  the  security  offered  is  a  second  lien  on  the  equipment  to  be 
acquired. 

7.  That  the  extent  to  which  the  public  convenience  and  necesnty 
will  be  served  by  the  loan  is  that  the  acquisition  of  these  locomotives 
will  enable  applicant  properly  to  insure  Uie  prompt  movonent  of  cars 
in  switching  at  terminals  and  division  points  which  can  not  be  done 
efficiently  with  its  present  equipment 

Said  application  was  accompanied  by  such  facts  and  details  as 
the  Commission  required  with  respect  to  the  physical  situation,  own- 
ership, capitalization,  indebtedness,  contract  obligations,  operation, 

eBi.o.c. 


LOAN   TO  ANN  ABBOB  B.   B.  91 

■nd  Mtmag  pow«r  of  the  applictnt,  together  witb  saeh  otlier  faeti 
relatiiig  to  the  propriety  and  expediency  of  grantmg  the  loan  ap- 
plied for  and  the  ability  of  ths  applicant  to  make  good  the  obliga- 
tion aa  the  Commission  deemed  pertinent  to  the  inquiry. 

No  recfonmendation  was  made  by  the  AsBociation  of  Bailway 
Ezecatives  respecting  this  loan. 

The  applicant  proposes  through  arrangement  made  with  the 
American  Locomotive  Company  to  provide  an  equipment-trust  cov- 
ering 60  per  cent  of  tiie  coat  of  the  three  switching  locomotives  pro- 
poeed  in  the  loan,  for  which  it  will  issue  first-lien  equipment-trust 
notes  for  a  like  amount,  payable  in  S6  monthly  installments,  and  it 
further  proposes  to  make  a  cash  payment  of  20  per  cent  of  the 
cost  of  said  equipment. 

The  arerage  annual  net  income  of  applicant  for  the  four  years 
ending  December  SI,  1920,  was  approximately  $90,000.  If  the  freight 
and  passenger  traffic  earnings  bad  been  on  the  basis  of  the  recent 
rate  increases  granted  by  the  Interstate  Commerce  Conunission,  the 
average  annual  net  income  for  the  same  period  would  have  been 
$1,811,600,  this  giving  assurance  of  applicant's  ability  to  meet  its 
obligations  to  the  United  States  in  connection  with  this  loan. 

After  investigation  and  consideration  of  applicant's  proposal  and 
other  facts  at  hand,  Qas  CcHnmission  finds  that  the  making  of  the 
proposed  loan  in  the  amount  of  $86,000,  which  is  approximately  80 
per  cent  of  the  cost  of  three  switching  locomotives  costing  approxi- 
mately $116,776,  by  the  United  States  for  the  aforesaid  purposes 
is  necessary  in  order  to  enable  the  applicant  properly  to  meet  the 
transp(Mi:atioii  needs  of  the  public;  that  the  prospective  earning 
power  of  the  applicant,  and  character  and  value  of  the  security 
offered,  afford  reasonable  assurance  of  the  applicant's  ability  to 
repay  the  loan  within  the  time  fixed  therefor,  and  to  meet  its  other 
obli^tions  in  connection  with  such  loan,  and  reasonable  protection 
to  the  United  States;  and  that  the  applicant  is  unable  to  provide 
itself  with  funds  necessary  for  aforesaid  purposes  from  other  sources 
except  at  excessive  rate*  of  interest 

An  appropriate  ccrtifieate  will  be  issued. 


G^rtifieate  No.  15  for  a  Lean  uttdar  Section  SJO  of  the  Tranaportation 
Aeiy  1980,  at  Amended. 

The  Interstate  Commerce  Commission  certifies  to  the  Secretary  of 
the  Treasury  its  findings: 

1.  Th^  the  making  of  a  loan  of  $35,000  by  the  United  States  to 
the  Ann  Arbor  Bailroad, Company,  hereinafter  referred  to  as  the 

esLaa 


.y  Google 


92  INTERSTATE  OOHMBBCB  COUHISSIOH   BEP0BT3. 

applicant,  for  the  purpose  of  aiding  it  to  provide  iteelf  witii  thrm 
new  switching  locomotiTes,  is  necessary  to  enable  the  applicuit 
properly  to  meet  the  transportation  needs  of  the  public. 

2.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  fumiab 
reasonable  assurance  of  the  applicant's  ability  to  r^ay  the  loan 
within  the  time  fixed  therefor  and  to  meet  its  other  obligations  in 
connection  with  such  loan. 

3.  That  the  amount  of  the  loan  which  is  to  be  made  is  ¥{Ul,0O0. 

4.  That  the  time  from  the  making  thereof,  within  which  the  loan 
16  to  be  repaid,  is  five  years. 

6.  That  the  terras  and  conditions  of  the  loan,  including  the  security 
to  be  given  for  repayment,  are :  The  loan  is  to  he  evidenced  by  ap- 
plicant's five  notes,  each  for  $7,000,  maturing  ia  frcna  one  to  five 
years  from  date  thereof,  as  follows ; 

Note  No.  ] ST.OOQ;  matuFlas  iWl, 

Note  No.  2 7,000;  maHulDs  1922. 

Note  No.  3 - — 7,000;  maturing  1823. 

Note  No.  *- - - 7,000;  nmturln*  1924. 

Note  No.  5 7,000;  nrntutng  ISSB. 

The  notes  shall  bear  interest  at  6  per  <»nt  per  annum,  payable  semi- 
annually, and  shall  be  secured  by  a  second  lien  on  the  equipmemt, 
subordinate  only  to  the  first  lien  on  the  said  equipment  to  secure 
the  equipment  notes  for  60  per  cent  of  the  parchase  price  which 
are  to  be  sold  or  offered  to  the  public  The  notes  given  to  the  United 
States  or  equipment  notes  deposited  as  collateral  security  therefor 
shall  be  secured  by  the  same  equipment-tmst  indenture  or  agreement 
of  conditional  sale  by  which  the  said  equipment  notes  to  be  sold  or 
offered  to  the  public  are  secured ;  title  to  the  equipment  not  to  pass 
to  the  applicant  nor  from  the  trustee  for  the  benefit  of  the  United 
States  until  the  loan  from  the  United  States  has  been  paid  in  fall  and 
applicant  has  fulfilled  all  its  obligations  in  regard  tiiereAo.  Aa  condi- 
tions precedent  to  the  making  of  the  loan,  it  shall  be  provided :  (a) 
That  titB  amount  of  said  first-lien  equipmeDt-trust  Bot«8  shall  not 
exceed  50  per  cent  of  the  cost  or  purdiase  price  of  said  equipment ; 
(b)  that  said  first-lien  equipment-tmst  notes  shall  be  repaid  in  three 
years,  in  S6  monthly  installments;  and  (c)  that  evidence  shall  be 
submitted  that  applicant  has  made  a  cash  contribution  of  20  per 
cent  of  the  cost  of  said  equipment  as  proposed  in  ita  application. 
The  applicant  shall  on  demand  of  the  Secretary  of  the  Treasury, 
with  ^e  concurrence  of  the  Interstate  Commerce  Commission,  do- 
posit  such  additional  security  as  may  be  from  time  to  time  required ; 
the  securities  pledged,  together  with  any  that  may  be  pledged  here- 
after, or  may  have  been  pledged  heretofore,  as  secnrity  for  this  loan 
or  any  other  obligation  of  the  applicant  to  the  United  States,  for 

e51,C.c. 


CMzcdoyGoOglC 


LOAK  TO  ANN  AUBOIt  tL   B.  98 

loans  nncler  section  210  of  th«  transportation  act,  1920,  as  amended. 
shall  be  applicable  in  like  manner  to  secure  the  payment  of  any  and 
all  sack  loans  and  advances.  Applicant  shall  hare  the  privilege  ol 
paying  any  of  all  installments  of  tlie  loan,  with  accrued  interest,  at 
any  time  before  maturity. 

6.  That  the  proiq)ectiTe  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish,  is  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor  and  reason- 
ble  protection  to  the  United  Statea 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  iteelf  with  the  funds  necessary  for  the  aforesaid  purpose 
from  other  sources,  except  at  excessive  rates  of  interest. 

Done  in  Washington,  D.  C.,  this  8d  day  of  August,  1920. 


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INTBBSIAIE  COMMXBCB  OOMM 


Finance  Docket  No.  80. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  ASH- 
LAND COAL  &  IKON  RAH.WAY  COMPANY  FOR  ATJ- 
THORITY  TO  ISSUE  SHORT-TERM  NOTES  IN  REFUND 
OF  MATURING  NOTES. 


Submtttea  Atvwt  4,  JM0.    DtttMl  Aufftut  «,  1M0. 


Authority  granted  for  tha  Issoe  of  fonr-moath  6  per  cent  prmnlMorr  notM,  nggn- 
gating  $100,000,  for  the  pnrpose  of  refunding  certain  otlier  notes, 

John  F.  Eager  for  applicant 

Rbport  and  Order  of  the  Cohmibbion. 
DinsiGN  4,  CoHHissioNERs  MsTEB,  Daniels,  Easthan,  and  Pottes. 
Bt  Division  4 : 

It  appearing,  That  the  Ashland  Coal  &  Iron  Railway  Company,  a 
common  carrier  engaged  in  interstate  commerce,  has  applied  to  this 
Commission  under  section  20a  of  the  interstate  commerce  act  for  an 
order  authorizing  it  to  issue  certain  of  its  promissory  notes,  aggre- 
gating the  sum  of  $150,000,  and  maturing  in  less  than  two  years  from 
the  dates  thereof,  in  refund  of  the  following  short-term  notes  owing 
by  said  railroad  company : 


D.,.. 

Uttuilt;. 

Piff«. 

Amomt. 

IKSSiB::::::: 
iKSaS::::::: 
iiaSl™::::::: 

JiilT»,l«0 

Auvut  3,U90.... 

tffiSS;:: 

11:8 

Afblud  iRNi  ft  Mlnlu  Cd^  IndccHd  to  nm 

m.va 

Aiiinrt»,lBa).... 
Nim>uber3S.lSa). 

^s&xiJSa.  "*~*  -  ^ 

It  further  appearing,  Tliat  the  application  was  made  in  such  form 
and  contained  such  matters  as  the  Commimon  preeciibed,  and  that 
it  was  made  under  oath,  signed,  and  filed  on  behalf  of  said  carrier 
by  one  of  its  executive  officers  having  knowledge  of  the  matters 
therein  srt  forth  and  dtily  designated  for  that  pnrpose  by  the  car- 
rier; and 

It  further  appearing.  That  notice  of  the  filing  of  said  applicatioii 
has  been  given  to  and  a  copy  thereof  filed  with  the  governor  of  tha 

« 1. 0.  a 


HOIB  IB6UB  or  iSHIAND  GOAL  A  IBON  BT.  95 

state  of  Kentucky,  the  tmly  state  in  which  said  carrier  operates, 
and  that  no  objection  to  the  iseue  by  the  Commission  of  an  order 
granting  the  application  has  been  offered  by  the  railroad  commis- 
sion, or  other  appropriate  authority  of  said  state;  and 

It  further  appearing,  That  full  investigation  of  the  matters  and 
things  involved  in  this  proceeding  has  been  had : 

Held,  That  the  proposed  issues  by  the  Ashland  Coal  &  Iron 
iUulway  Company  (a)  are  for  a  lawful  object  within  its  corporate 
purposes,  and  compatible  with  the  public  interest,  which  is  necessary 
and  appropriate  for  and  consistent  with  the  proper  performance 
by  it  of  service  to  the  public  as  a  common  carrier,  and  which  will 
not  impair  its  ability  to  perform  that  service;  and  {b)  are  reason- 
ably necessary  and  appropriate  for  such  purpose. 

It  it  therefore  ordered^  That  the  Ashland  Coal  A  Iron  Bailway 
Company  be,  and  it  hereby  is,  authorized  to  issue  its  promissory 
note  or  not«8  up  to  a  principal  sum  of  $150,000  for  the  sole  purpose 
of  refunding  its  hereinbefore-mentioned  maturing  notes  in  amounts 
of  face  value  equal  to  the  face  value  of  not«s  to  be  issued  from 
time  to  time,  such  note  or  notes  to  run  for  not  more  than  four 
months  from  their  respective  dates  and  to  bear  interest  at  not  ex- 
ceeding 6  per  cent  per  annum,  provided  that  only  such  principal 
simi  of  such  note  or  notes  shall  be  issued  as  may  be  necessary  to 
refund  the  notes  as  they  mature  and  in  amounts  equivalent  to  the 
face  value  of  notes  to  be  refunded. 

//  is  further  ordered.  That  nothing  herein  shall  be  construed  to 
imply  any  guaranty  or  obligation  as  to  said  promissory  note  or 
notes,  or  interest  thereon,  on  the  part  of  the  United  Stetes. 

And  it  is  further  ordered,  That  this  order  shall  take  effect  on  thn 
3d  day  of  August,  A.  D.  1920,  and  continue  in  force  until  otherwise 
ordered  by  the  Commission. 

es  I.  c.  c. 


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niTBBSTATX  OOICMBBOX   OOICUISBION  BMPOBIS. 


Finance  Dooket  No.  950. 
IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  DELA- 
WARE &  HUDSON  COMPANY  FOR  A  LOAN  FROM  THE 
UNITED  STATES  TO  PROVIDE  NEW  EQUIPMENT  AND 
OTHER  ADDITIONS  AND  BETTERMENTS. 


BubmitUd  JtHM  18.  IStO.    DetMed  A«OM*t  0, 19t». 


AppllcatloD  granted  In  part  and  loao  of  91,1116,400  amnvred. 
IF.  B.  WiUiama  for  applicant. 

Rkpobt  of  tbb  Commission. 
DmaoN  4,  Cohmissionjekb  Mbt>b,  Daniblb,  and  Eastman. 
Bt  DmsioN  4; 

The  Delaware  &  Hudson  Company,  a  carrier  by  railroad,  subject 
to  the  interstatA  commerce  act,  hereinafter  referred  to  as  the  appli- 
cant, on  June  19, 1920,  made  application  to  the  Interstate  Commerce 
Commission  for  a  loan  from  the  United  States  in  accordance  with 
flection  210  of  the  transportation  act,  1920,  as  amended,  pursuant 
to  the  Commission's  announcement  of  June  7,  1920,  of  the  general 
principles  by  which  it  would  be  goremed  in  administering  the  fund 
created  by  section  210  of  the  act. 
Id  the  application  the  carrier  sets  forth : 

1.  That  the  amount  of  the  loan  desired  is  $3,475,000. 

2.  That  the  term  for  which  the  loan  is  desired  is  15  yean. 

8.  That  the  purpose  of  the  loan  is  to  provide  itself  with  equip- 
ment and  additions  and  betterments  as  follows:  Equipment  purchase 
of  passenger-train  cars,  including  15  milk  cars,  at  estimated  cost  of 
$1,225,000;  additions  and  betterments  to  way  and  structures  at 
estimated  cost  of  $2,250,000;  total,  $3,475,000. 

4.  That  the  use  to  which  the  loan  will  be  applied  is  as  above  stated. 

6.  Its  present  and  prospective  ability  to  repay  the  loan  and  meet 
the  requirements  of  ite  obligations  in  that  regard. 

6.  That  the  security  offered  ia  $3,473,000  of  ite  4  per  cent  first  and 
refunding  mortgage  bonds,  which  are  secured  by  mortgage  dated 
May  1,  1908,  and  maturing  in  1943,  and  stock  of  the  f<dlowing  cor- 
porations owned  by  the  applicant: 

6fi  I.  c.  a 


DKi.iv^^yCoOglc 


LOAN  TO  DBLAWABE  *  HUDSOH  GO. 


^s: 


T  *  L«Jn  PUdd  RiUnr  Compur  (P».] 


6.  That  the  extent  to  which  the  public  convenience  and  necessity 
will  be  served  by  the  loan  is  that  a  saving  of  approximately  1,000 
cars  and  2  locomotives  would  be  had  and,  in  addition  thereto,  savings 
is  operation  costs  would  be  entailed,  and  the  efficiency  and  capacity  of 
the  railway  would  be  correspondingly  increased. 

Said  application  was  accompanied  by  such  facts  in  detail  as 
required  with  respect  to  the  physical  situation,  ownership,  capitaliza- 
tion, indebtedness,  contract  obligations,  operation,  and  earning  power 
of  the  applicant,  together  with  such  other  facts  relating  to  the  pro- 
priety and  expediency  of  granting  the  loan  applied  for  and  the 
ibility  of  the  applicant  to  make  good  the  obligation  as  deemed  perti- 
nent to  the  inquiry. 

The  Association  of  Railway  Executives  recommended  a  loan  to 
the  applicant  as  follows;  additions  and  betterments  to  promote  move- 
ment of  cars,  $2,260,000. 

After  investigation,  we  find  that  the  making  in  part  to  the  applicant 
of  the  proposed  loan  in  approximately  the  following  amounts  for 
kdditions  and  betterments  to  promote  movement  of  cars: 


PiBPOWU 

EsUm*tsd 
ent. 

3S. 

PKOttlt. 

BMtM. 

EDO,  000 

«s 

i 

2,ao,ooo 

1,1»,W» 

to 

by  the  United  States  for  the  aforesaid  purposes  is  necessary  in  order 
to  enable  the  applicant  properly  to  meet  the  transportation  needs  of 
the  public ;  that  the  prospective  earning  power  of  the  applicant,  and 
charactei'  and  value  of  the  security  offered,  afford  reasonable  assur- 
t&ee  of  the  applicant's  ability  to  repay  the  loan  within  the  time  fixed 
therefor,  and  to  meet  its  other  obligations  in  connection  with  such 
loan,  and  reasonaUe  protection  to  the  United  Statfis ;  and  that  the 
applicant  is  unable  to  provide  itself  with  funds  necessary  for  aforo- 
9ud  purposes  from  other  tottrces. 

Further  consideration  will  be  given,  upon  separate  application,  to 
■  loan  to  the  applicant  tot  the  acquisition  of  15  milk  cars  on  con- 
dition that  the  applicant  undertake  to  finance  79  per  cent  of  the 
total  cost  thereof. 

An  appropriate  certificate  wiU  be  issued. 

eraw— 22— VoL» 7  P,,,i^^j  J?^35&(9qIc 


B8  nrTEBSTATE  COUMEBCE  OOICHISSION  BEPORTS. 

Certificate  No.  16  for  a  Loan  under  Section  BIO  of  the  TranaportaHon 
Act,  19X0,  at  Amended. 

The  Interstate  Commerce  Commisedon  certifies  to  the  Secretary  of 
the  Treasury  its  findings: 

1.  That  the  making  of  a  loan  of  $1,125,000  by  the  United  States  to 
the  Delaware  &  Hudson  Company,  hereinafter  referred  to  as  the  ap- 
plicant, for  the  purpose  of  making  additions  and  betterroente  to  pro- 
mote the  movement  of  cars,  is  necessary  to  enable  the  applicant 
properly  to  meet  the  transportation  needs  of  the  public. 

2.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  furnish 
reasonable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor  and  to  meet  its  other  obligations  in 
connection  with  such  loan. 

S.  That  the  amount  of  the  loan  which  is  to  be  made  is  $1,125,000. 

4.  That  the  time  from  the  making  thereof  within  which  the  loan  ia 
to  be  repaid  is  15  years, 

5.  That  the  terms  and  conditions  of  the  loan,  including  the  securitry 
io  be  given  for  repayment,  are : 

The  loan  shall  be  evidenced  by  the  applicant's  note  or  notes, 
aggregating  $1,125,000,  payable  16  years  from  the  date  of  the  making 
thereof,  with  interest  at  tie  rate  of  6  per  cent  per  annum,  payable 
semiannually,  and  shall  be  collaterally  secured  by  pledge  of  the  fol- 
lowing securities:  $1,700,000,  face  value,  of  the  applicant's  first  and 
refunding  mortgage  bonds  due  194S. 

The  applicant  shall,  on  demand  of  the  Secretary  of  the  Treasury, 
with  the  concurrence  of  the  Interstate  Commerce  Commission,  deposit 
with  the  Secretary  of  the  Treasury  such  additional  security  as  he 
may  from  time  to  time  require ;  the  securities  pledged,  together  with 
any  that  may  be  pledged  hereafter,  or  may  have  been  pledged  here- 
tofore, as  security  for  this  loan  or  any  other  obligations  of  the  said 
applicant  to  the  United  States  for  loans  made  under  section  210  of 
the  tran^Kirtation  act,  1920,  as  amended,  shall  be  applicable  in  like 
manner  to  secure  the  payment  of  any  and  all  such  loans  and  advances. 

The  securities  pledged  or  to  be  pledged  as  collateral  security  shall 
be  released  proportionately  as  installmente  are  paid. 

There  shall  be  filed  with  the  Secretory  of  the  Treasury  the  opinion 
of  counsel,  who  may  be  of  counsel  for  the  applicant,  in  respect  of  the 
security  taken,  which  opinion  shall  show  without  doubt  the  corpor^c 
power  to  issue,  give,  and  pledge  such  secuntiee,  the  proper  exercise 
of  said  corporate  power,  and  the  validity  of  the  securities  and  of  the 
.  pledge  thereof.    The  opinion  shall  cover  (a)  the  legality  of  organiia- 

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LOAN  TO  DBLAWABB  A  HUDSON  CO.  99 

tioQ  and  corporate  power  to  issue,  give,  and  pledge  the  securities; 
(b)  the  legality  of  authorization  of  the  issue  and  pledge  of  the 
securities;  (c)  the  legality  of  the  issue  of  the  securities  and  of  the 
pledge  thereof;  and  (d)  the  validity  of  the  securities  and  of  the 
pledge. 

Applicant  shall  have  the  option  of  paying  any  or  all  infitallmenU 
of  Uie  loan,  with  accrued  interest,  at  any  time  before  maturity. 

Aa  a  further  condition  precedent  to  the  making  of  tiie  loan,  the 
amount  to  be  financed  by  the  applicant  in  connection  therewith  shall 
be  so  financed  that  the  cost  to  t^e  applicant  of  any  loans  secured 
from  sources  other  than  the  United  States  government  shall  not 
exceed  7  per  cent  per  annum,  including  in  such  cost  discount,  attor- 
neys' fees,  and  any  and  all  other  expenses  in  connection  therewith. 

The  expenditures  made  from  the  loan  shall  be  confined  to  such 
expenditures  as  are  chargeable  to  accounts  for  investment  in  road 
and  equipment  provided  in  the  Commission's  accounting  classification 
of  accounts  for  steam  roads  in  effect  at  the  time  the  expenditures  are 
made.  No  part  of  said  loan  shall  be  used  for  expenditures  chargeable 
to  operating  expenses  or  to  accounts  other  than  those  provided  for 
investment  in  road  and' equipment. 

The  applicant  shall  furnish  to  the  Commission  on  or  about  January 
1  and  July  1,  1921,  the  detailed  certificate,  under  oath  of  its  chief 
engineer,  showing  the  character  and  cost  of  the  additions  and  better- 
ments made  with  or  in  connection  with  the  funds  provided  by  this 
loan  for  said  purposes.  In  event  any  part  of  this  loan  for  additions 
and  betterments  shall  not  have  been  expended  or  definitely  obligated 
for  the  purposes  for  which  loaned  on  or  before  July  1,  1921,  the 
Secretary  of  the  Treasury,  upon  recommendation  of  the  Commission, 
may  declare  such  part  due  and  payable  at  once. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish,  in  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor,  and  reason- 
able protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  itself  with  the  funds  necessary  for  the  aforesaid  purpose 
from  other  sources  except  at  excessive  rates  of  interest. 

Done  in  Washington,  D.  C,  this  10th  day  of  August,  1920, 
eei.cc 


.dbyGoogiu._ 


INTEBSTAXE  COHMEBOE  CDUHISSON  BXBO&TS. 


Finance  Docket  No.  941. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  CHI- 
CAGO GREAT  WESTERN  RAILROAD  COMPANY  FOR  A 
LOAN  FROM  THE  UNITED  STATES  TO  AID  IN  PRa 
VIDING  NEW  EQUIPMENT  AND  OTHER  ADDITIONS 
AND  BETTERMENTS. 


Submittea  Avffttil  S,  19i0.    DecUed  Augutt  10,  I9S0. 


Application  granted  In  port  and  loan  of  5997,830  approved, 

S.  M.  Felton  for  applicant. 

Repoett  of  the  Coumissiox. 
DiviBioN  4,  Commissioners  Meter,  Daniew,  Eastman,  and  Pottek. 
Bt  Division  4 : 

The  Chicago  Great  Western  Railroad  Company,  a  carrier  by  rail- 
road subject  to  the  interstate  commerce  act,  hereinafter  referred  to 
as  the  applicant,  on  May  13, 1920,  made  application  to  the  Interstate 
Commerce  Commission  for  a  loan  from  the  United  States  in  accord- 
ance with  section  210  of  the  transportatioa  act,  1920,  and  on  June  23, 
1920,  applicant  amended  and  supplemented  its  application  pursuant 
to  the  Commission's  announcement  of  June  7,  1920,  of  the  general 
principles  by  which  it  would  be  governed  in  administering  the  fund 
created  by  section  210  of  the  act. 

In  the  application,  as  amended  and  supplemented,  the  carrier  sets 
forth : 

1.  That  the  amount  of  the  loan  desired  is  $804,500. 

2.  That  the  terra  for  which  the  loan  is  desired  is  15  years. 

3.  That  the  purpose  of  the  loan  is  to  provide  funds  for  the  pur- 
chase of  new  equipment  and  for  the  making  of  other  additions  and 
betterments  as  follows : 

Totnl  riiRt.  Rpq  netted. 

Frelgftt equipment  (new) $5.12.000        J2TO.O0O 

Express  and  mail  cars  (new) 170,000  ee,0(K) 

Additions  and  betterment!  to  existing  fralgbt  equipment.      477, 000  238,  SOO 

Additions  and  betterments  to  roadwaj-,  sHops,  and  freight 

and  passenger  stations 410.000         2OS.000 

Total— 1.609,000  80*,  500 

4.  That  the  use  to  which  the  loan  will  be  applied  is  financing  the 
purchase  of  the  new  equipment  and  the  making  of  the  other  addi- 
tions and  betterments  as  and  to  the  extent  aforesaid. 

«5 1,  c.  a 


LOAN  TO  OHICAOO  QBEU.I  WIBTEBN  A.  R.  101 

S.  Ite  present  and  prospective  ability  to  repay  the  loan  and  meet 
the  requirements  of  its  obligations  in  that  regard. 

€.  That  the  security  offered  is  the  applicant's  first-mortgage  60- 
year  4  per  cent  gold  bonds  of  such  amount  as,  in  the  judgment  of 
the  Commission,  will  furnish  adequate  value  to  protect  the  loan. 

7.  That  the  extent  to  which  the  public  convenience  and  necessity 
will  be  served  by  the  loan  is  that  the  applicant  will  be  enabled  to 
handle  all  traffic  offered  without  the  delays  or  congestions  which  are 
now  frequent. 

Said  application  was  accompanied  by  such  facts  and  details  as  the 
Commission  required  with  respect  to  the  physical  situation,  owner- 
ship, capitalization,  indebtedness,  contract  obligations,  operation,  and 
earning  power  of  the  applicant,  together  with  such  other  facts  re- 
lating to  the  propriety  and  expediency  of  granting  the  loan  applied 
for  and  the  ability  of  the  applicant  to  make  good  the  obligation  as 
the  Commission  deemed  pertinent  to  the  inquiry. 

After  the  submission  of  the  ajnended  application  the  applicant,  in 
its  telegram  of  June  24,  1920,  stated  that  the  total  estimated  cost  of 
rebuilding  the  equipment,  for  which  loan  had  been  requested,  is 
$S8S,660,  instead  of  $477,000,  as  previously  stated,  and  that  a  loan 
of  the  entire  amount,  $882,660,  is  desired.  In  a  tel^ram  of  July  20, 
1920,  applicant  added  to  the  items  for  which  loan  is  desired  the  cost 
of  rebuilding  30  ooal  cars,  estimated  at  $^0,000,  and  the  coat  of 
heavier  rail,  amounting  to  $500^)00.  It  requested  a  loan  for  the  full 
amount  of  those  added  items  and  withdrew  frinn  consideration  the 
request  for  aid  in  acquiring  passenger  equipment  and  improving 
freight  and  paseugar  stations.  As  revised  hy  these  telegrams,  the 
amounts  of  loan  desired  and  amounts  of  loan  recommended  by  the 
Association  of  Itailway  Executives  are  as  followB: 


It»m. 

"ST' 

Lnuin- 

Louirte- 

si:E 

tx.toa 

■TIE 

I.«S,«0 

2.0M,1M 

i,5a»,i(U 

The  difference  between  the  total  of  loan  as  finally  requested  by  the 
applicant  and  as  recommended  by  the  Association  of  Railway  Execu- 
tives is  explained  by  the  absence  of  recommendation  by  the  railway 
executives  of  a  loan  of  $500,000  for  the  purchase  of  new  rail. 

After  investigation  the  Commission  tinds  that  the  making  of  a 
loan  to  the  applicant  for  the  purposes  and  in  the  amounts  herein 
below  stated. 

60LC.U 


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UrTBKSTATB   COHMIBOB  COUHISSIOK  BEPOBTS. 


Pwpo-. 

ooM. 

iSJC 

SpUpn^U. 

KM.OW 

ua.ooo 

130,000 

isi.ooo 

xn,m 

Otkcr  oMUlMt  and 

ran  uma  ud  stwi,  bnltt-ap  ftMd 

ESSS&'fS 

1,9»S,«10 

' 

ja  necessary  in  order  to  enable  the  applicant  properly  to  meet  the 
transportation  needs  of  the  public;  that  the  prospective  eandnff  power 
of  the  applicant,  and  character  and  value  of  the  security  offered, 
afford  reasonable  assurance  of  the  appbcant's  ability  to  repay  the 
loan  within  the  time  fixed  therefor,  and  to  meet  its  other  obligationa 
in  connection  with  such  loan,  and  reasonable  protection  to  the  United 
States;  and  that  the  applicant  is  unable  to  provide  itself  with  funds 
necessary  for  aforesaid  purposes  from  other  sources  except  at  exces- 
sive rates  of  interest 

The  request  of  the  applicant  for  a  loan  of  $500,000  for  the  purchase 
of  new  rail  was  not  accompanied  by  information  as  to  the  extent  to 
which  the  loan  would  facilitato  the  movement  of  cars,  and  as  to  the 
plan  and  details  of  cost  of  the  work  proposed,  in  accordance  with  the 
Commission's  circular  of  June  7,  1920.  The  Association  of  Railway 
Executives  has  not  recommended  a  loan  to  the  applicant  for  the 
foregoing  purpose.  The  Commission  is  of  the  opinion,  therefore, 
that  consideration  of  the  applicant's  request  for  a  loan  for  the  pur- 
chase of  new  rail  should  be  deferred. 

An  appropriate  certificate  will  be  entered. 


Certificate  No.  17  for  a  Loan  under  Section  HO  of  the  Transportation 
Act,  1920,  aa  Amended. 

The  Interstate  Commerce  Commission  certifies  to  the  Secretary 
of  the  Treasury  its  findings : 

1.  That  the  making  of  a  loan  of  $997^80  by  the  United  States  to 
the  Chicago  Great  Western  Railroad  Company,  hereinafter  referred 
to  as  the  applicant,  for  the  purpose  of  providing  it  with  equipment 

csLca 


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tOAlS  TO  OHIOAOO  Q^UT  WEKTEBN  B.  B.  108 

and  other  ftddituHu  and  betterments,  ]a  mceasary  to  enable  the  ap- 
plicant properly  to  meet  the  tranaportation  needs  of  the  public. 

S.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  aa  to  furnish 
reasMiable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor  and  to  me^  its  other  obligations  in 
connection  with  such  loan. 

8.  That  the  amount  of  the  loan  which  shaU  be  made  is  $997^830. 

4.  That  the  time  from  the  making  thereof  within  which  the  loan 
shall  be  repaid  shall  be  16  yeara. 

5.  That  the  team  and  conditions  of  the  loan,  including  the  security 
to  be  given  for  repayment,  shall  be : 

The  loan  shall  be  evidenced  by  applicant's  ntrte  for  $997,880,  ma- 
turing in  15  years  from  the  date  thereof ;  said  notes  shall  bear  inter- 
est at  6  per  cent  per  annum,  payable  semiannually,  and  shall  be 
further  secured  to  the  United  States  by  the  pledge  of  the  applicant's 
first-mortgage  4  per  cent  gold  bonds,  due  September  1,  19&9,  in  the ' 
sum  of  $2,494,000. 

There  ^all  be  filed  with  the  Secretary  of  the  Treasury  the  opin-  - 
ion  of  counsel,  who  may  be  of  counsel  for  the  applicant,  in  respect 
to  the  security  taken,  whii^  opinion  shall  show  without  doubt  the 
corporate  power  to  issue,  give,  and  pledge  such  security,  the  proper 
exercise  of  said  corp(»ate  power,  and  the  validity  of  the  securities 
and  of  the  pledge  thereof.  The  opinion  shall  cover  (a)  the  legality- 
of  the  organization  and  corporate  power  to  issue,  give,  and  pledge 
the  securities;  (&)  the  legality  of  authorization  of  the  issue  and 
pledge  of  the  securities;  (o)  the  legality  of  the  is&ue  of  the  securl* 
ties  and  of  the  pledge  thereof;  and  (d)  the  validity  of  the  securities 
and  of  the  pledge  thereof. 

The  applicant  shall  have  the  privilege  of  paying  any  part  or  all 
of  the  loan,  with  accrued  interest,  at  any  time  before  maturity.  The 
bonds  pledged  as  collateral  security  shall  be  released  proportionately 
as  the  loan  is  paid. 

The  applicant  shall,  on  demand  of  the  Secretary  of  the  Treasury, 
with  the  concurrence  of  the  Interstate  Commerce  Commission,  de- 
posit with  the  Secretary  of  the  Treasury  such  additional  security 
as  he  may  from  time  to  time  require,  and  the  securities  pledged, 
together  with  any  that  may  be  pledged  hereafter,  or  may  have  been 
pledged  heretofore,  as  security  for  this  loan  or  any  other  obligation 
of  the  said  applicant  to  the  United  States,  for  loans  under  section 
210  of  the  transportation  act,  1920,  as  amended,  shall  be  applicable 
in  like  manner  to  secure  the  payment  of  any  and  all  such  loans  and 
advances. 

«6l.c.a 


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104  INTBRSTATB  COICHEBGB  COUlUBSIOir  BBFOBIS. 

The  applicant  shall  furnish  to  the  Commission  on  or  about  Jan- 
uary 1  and  July  1,  1921,  the  detailed  certificate,  under  oath  of  its 
chief  engineer,  showing  tiie  character  and  cost  of  the  additions  and 
betterments  made  with  or  in  connection  with  the  fnnds  provided  by 
this  loan  for  said  purposes.  In  event  any  part  of  this  loan  for  addi* 
tions  and  betterments  shall  not  have  been  expended  or  definitely 
obligated  for  the  purposes  for  which  loaned  on  or  before  July  1, 
1921,  the  Secretary  of  tiie  Treasury,  upon  recommendation  of  the 
Gommifision,  may  declare  such  part  due  and  payable  at  once. 

The  cost  to  the  applicant  of  any  loan  which  may  he  secured  from 
sources  other  than  the  United  States  for  use  in  connection  with 
this  loan  shall  not  exceed  7  per  cent  per  annum,  including  in  such 
ooet  discount,  attorneys*  fees,  and  any  and  all  other  expenses  in 
connection  therewith. 

No  part  of  said  loan  for  additions  and  betterments  shall  be  used 
for  purposes  which,  under  the  accounting  regulations  of  the  Com- 
mission, might  or  would  be  chargeable  to  accounts  other  than  those 
prescribed  in  the  present  classification  of  investment  in  road  and 
equipment  of  steam  roads. 

As  a  further  conditioh  precedent  to  the  making  of  the  loan,  the 
board  of  directors  or  executive  committee  of  the  applicant  shall  by 
resolution  authorize  the  acceptance  of  the  loan  under  the  conditions 
herein  imposed,  and  the  applicant  shall  file  with  the  Secretary  of 
the  Treasury  a  duly  certified  copy  of  such  resolutions. 

6.  That  the  prospective  eaFoing  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish,  in  the 
opinion  of  the  Commission,  reasonable  assuruue  of  Uie  applicant^ 
ability  to  repay  the  loan  within  the  time  fixed  therefor,  and  reason- 
able protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  un- 
able to  provide  itself  with  the  funds  necessary  for  the  aforesaid 
purpose  from  other  sources  except  at  excessive  rates  of  interest. 

Done  in  Washington,  D.  C,  this  10th  day  of  August,  1920. 

esLca 


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1£JlSB  07  VAUJSY  TERHINAI.  SX. 


Finance  Docket  Wo.  1. 


IN  THE  MATTER  OF  LEASE  OF  THE  VALLEY  TERMINAL 
RAILWAY  PROPERTY. 


Subtnittea  July  a,  1920.    Decidfil  Augutt  IS,  1320. 


1.  Id  secttoD  S  of  the  Interstate  commerce  act  Oungress  ti^^^ded  a  complete 

scbem*  of  regulation  of  coatracts  or  other  arrangementa  wbereb;  one  com- 
moit  carrier  subject  to  tbe  act  mistat  sacare  control  of  another  such 
carrier,  either  by  consolidation  into  one  corporation,  or  in  some  manner 
not  Involving  such  consolidation,  or  by  entering  Into  an;  agreement  for 
the  pooling  of  freight  or  enrnlags  with  a  competing  railroad. 

2.  The  lease  submitted  bj  the  applicant  carriers,  by  which  the  Talley  Terminal 

Railway  leases  t«  the  8t.  Loots  Southwestern  Ballway  Company  all  the 
property  now  owned  or  hereafter  acquired  by  the  Valley  Terminal,  Is 
lawful  only  if,  and  to  the  extent  that.  It  Is  approved  by  us. 

3.  Said  lease  approved  for  a  period  of  two  years  from  March  1,  1920.    Provision 

for  Indefinite  continuance  of  the  lease  beyond  the  term  of  two  years 
until  terminated  by  mutual  agreement  of  the  parties  In  writing,  disap- 
proved. 

Daniel  Upthegrove  and  L.  0.  Whitnel  for  St.  Louis  Southwestern 
Railway  Company  and  Valley  Terminal  Railway. 

Repoht  of  tbb  Commission. 

OlViaiON  4,  COUHISSIONEBS  MCTEB,  DaNIEU,  AND  EaSTUAN. 

Bt  DivraioK  4 : 

The  St  Ixmis  Southwestern  Railway  Company,  hereinafter  termed 
the  Cotton  Belt,  and  the  Valley  Terminal  Railway,  hereinafter  called 
the  Valley  Terminal,  seek  authority  under  paragraph  (S)  of  section 
5  of  the  interstate  commerce  act  for  approval  by  ub  of  a  lease  to  the 
Cotton  Belt  of  all  the  property  now  owned  or  hereafter  acquired  by 
the  Valley  Terminal. 

The  Cotton  Belt  owns  a  line  extending  from  the  state  line  between 
Texas  and  Arkansas  at  Tezarkana,  where  it  connects  with  that  of  the 
St.  Louis  Southwestern  Railway  Company  of  Texas,  through  Ar- 
kansas and  Missouri  to  Illmo,  Mo.  At  that  point  its  line  connects 
with  the  tracks  of  the  Southern  Illinois  &  Missouri  Bridge  Com- 
pany, in  which  it  has  a  one-fifth  interest.  Its  trains  cross  to  Thebes, 
]'!!.,  on  the  east  bank  of  the  MiasisBippi,  on  the  tracks  of  tlie  bridge 

•0I.O.C. 


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106  INTBBSTA.n  OOmCBBGB  OOMUIBSIOH  BBPOKTS. 

company,  and  reach  Valley  Junction,  in  Sast  St.  Louis,  IlL,  over  the 
tracks  of  the  Missouri  Pacific  Railroad  Company  under  a  trackage 
agreement  permitting  it  to  operate  its  trains  over  that  line  fn»n  the 
connection  with  the  bridge  company's  tracks  at  Thebes  to  YaUey 
Jlinction,  a  distance  of  119.26  miles.  The  trackage  agreement  was 
made  on  September  8,  1804,  with  the  St.  Louis,  Iron  Mountain  & 
Southern  Railway  Company,  whose  property  was  secured  by  the 
Missouri  Pacific  as  a  result  of  foreclosure  proceedings ;  and  by  sup- 
plemental agreement,  dated  April  28,  190&,  the  duration  of  the  con- 
tract was  extended  for  a  term  of  60  years  from  September  8, 1904. 

The  Vall^  Terminal  was  organized  under  the  general  railroad 
laws  of  the  state  of  Illinois.  It  is  a  nonoperating  company  whose 
.  property  is  used  in  interstate  commerce.  Its  authorized  capital  stock 
of  $5,000,  which  is  fully  paid,  is  owned  by  the  Cotton  Belt,  except  for 
qualifying  shares  of  the  directors.  There  is  a  substantial  identity 
between  the  officers  of  the  Cotton  Belt  and  those  of  the  Valley  Termi- 
nal. The  Valley  Terminal  has  given  its  notes  for  $840,431.64  to  the 
Cotton  Belt  for  cash  advanced  by  the  latter  and  used  in  the  purchase 
and  construction  of  the  property  of  the  Valley  Terminal,  There  are 
no  other  securities  outstanding,  and  with  the  exception  of  a  few  un- 
determined items,  which  the  Cotton  Belt  assumes  under  the  lease,  the 
latter  road  is  the  only  creditor  of  the  Valley  Terminal. 

Subsequent  to  the  execution  of  the  trackage  agreement  with  the 
St.  Louis,  Iron  Mountain  &  Southern,  the  latter  constructed  yards 
and  terminals  about  7  miles  south  of  East  St.  Louis,  called  the  Dupo- 
Bixby  yards,  and  the  Cotton  Belt  acquired  the  right  to  joint  use  of 
said  yards.  As  the  business  of  the  two  roads  increased,  these  yards 
became  inadequate  for  such  use.  The  Iron  Mountain,  and  later  the 
Missouri  Pacific,  controlled  the  yards,  and  the  service  was  particu- 
larly unsatisfactory  to  the  Cotton  Belt.  This  was  explained  in  some 
detail  at  the  hearing,  but  it  is  sufficient  to  state  that  the  service  was 
considerably  delayed,  particularly  in  severe  weather,  that  great  diffi- 
culty was  experienced  in  repairing  bad-order  cars,  and  that  the  Cot- 
ton Belt  was  unable  to  utilize  its  cars  and  locomotives  as  effectively 
as  it  could  have  done  with  adequate  terminal  facilities. 

Accordingly,  the  Valley  Terminal  was  incorporated  on  July  24, 
1913,  for  the  purpose  of  acquiring  necessary  land  and  constructing 
yards,  terminals,  and  facilities  for  the  Cotton  Belt  at  East  St.  Louis, 
111.  Apparently  the  reason  for  the  orgamzation  of  a  separate  corpo- 
ration was  that  the  prc^rty  of  the  Cotton  Belt  was  covered  by  four 
mortgages,  each  of  which  contained  a  provision  making  its  terms 
apply  to  property  thereafter  acquired  by  that  road.  After  some  in- 
vestigation of  the  sites  available,  the  one  now  occupied  was  selected 
for  the  reasons,  among  others,  that  it  was  convenient  to  East  St. 

e5 1,  c.  a 


;..,  Google 


UBABB  OF  TAIXaZ  TBEICINAI.  BT.  107 

Louis,  that  there  wu  room  to  switch  tnias  of  100  cars,  and  that 
there  vas  room  for  extension  of  the  termioal  facilities  should  it  be- 
come neceesary. 

The  Valley  Tenmnal  acquired  1S6.0&&  acres  of  ground  and  had,  by 
September  1,  1918,  completed  the  construction  on  the  land  so  ac- 
quired of  certain  tracks,  sidetracks,  spur  tracks,  and  other  tracks, 
and  a  station,  platform,  roundhouse,  vator  tank,  and  other  facilities 
necessary  for  a  well-equipped  terminaL  All  twdinary  repairs  to 
equipment  can  be  made  at  the  terminal. 

Upon  the  completion  of  the  terminal,  the  President,  on  September 
1,  1918,  through  the  Director  General  of  Bailroads,  took  over  the 
possession,  use,  and  control  of  all  of  the  property  of  the  Valley 
Tenninal  and  held  it  under  federal  contnd  until  March  1,  1920. 

The  stockholders  and  directors  of  the  Cotton  Belt  and  the  Valley 
Terminal  have  authorized  the  lease  and  it  was  executed  by  the  offi- 
cers of  the  lespective  companies  on  March  29,  1920.  It  wag  testified 
that  the  carriers  have  complied  with  the  requirements  of  the  states 
of  Illinois  and  Missouri  in  the  premises.  No  one  appeared  at  the 
hearing  to  oppose  the  approval  of  the  lease.  The  substance  of  the 
lease  is  indicated  in  the  margin.* 

Owing  to  the  necessity  for  giving  80  days*  notice  to  the  Missouri 
Pacific  that  it  would  no  longer  use  the  Dupo-Bizby  yards,  the  lease 
did  not  become  effective  until  April  1,  1920.  Since  that  time  the 
applicant  carriers  have  operated  under  the  terms  of  the  lease.  Evi- 
dence was  introduced  by  the  officers  in  charge  of  operaticm  on  the 
Cotton  Belt  which  showa  that  the  use  of  the  Valley  Terminal  yards 

>Tb*  lean  proTldv.  Id  ■nbitancc,  tli«t  In  conaldcratloo  o(  tbe  lum  ot  91,  aod  of  the 
ytrtojamaet  of  tbe  eoveautt  and  MtpUatlou  tbanlD  Mt  torUt,  tbe  VaUey  Tamlnal 
Ma  to  tbe  Cotton  B«1t  aU  of  Ita  propcrtj,  jarda,  and  tarmlnala  described  In  the  leane,  and, 
tlw,  aU  other  piopertT  wblcb  It  mar  heraafter  acQulre  or  conatrnct,  "  for  two  yeara  from 
ud  after  Uarcb  1.  1930,  and  thrreaner  nntll  thla  contract  iball  be  termlnsted  br  tbe 
Bntnal  asraemeBt.  In  wrlUna,  of  tbe  pactin  hanto  "  ;  tbat  the  Cotton  Belt  wilt  extend 
Oa  pkjment  of  an?  Indabtedneaa  Incurred  br  tbe  ValUy  Terminal  la  coDQCctloD  with  tbe 
(OnatmctloD  of  tbe  terminal  and  will  pay  the  Intareat  of  aald  lodcbtedoea*  when  due  ;  tbat 
tb*  Cotton  Belt  will  paj  all  ta»i  oB  tbe  proiwrtr  lea»ed,  aa  well  aa  all  aiuns  oeceaiacj 
to  keep  up  and  maintain  tbe  eorporat*  exlitesce  and  ertanlaatlon  of  the  Valley  Terminal ; 
that  tb«  O>ttoa  Belt  ahall.  at  Ita  own  coat,  opaiata  and  nalDtaln  wld  jwrdi  and  tcrmlnala 
aad  fnmtab  adeqnate  aerrlc*  to  tb>  pablte;  that  the  Cotton  Beit  iball  bare  the  rlgbt  to 
li  all  tatea  and  cbarsea  tor  acrTlcea  performed  is  the  operation  of  lald  yardi  and  ter~ 
Blaala,  ao  fat  aa  tbe  law  pennlta,  and  ahaU  recalTe  all  of  neb  eamlnn ;  tbat  the  VaU«7 
TcnatDal  nay,  wltk  tbe  wrlttra  conaent  of  tbe  Cotton  Belt,  craat  any  other  company 
•c  conponlM  the  rifht  ta  nae  said  yarda  and  termlnala,  bnt  In  such  rient  all  amonota 
paU  for  aneb  nae  atall  bcoim  t*  tba  Cottan  B*It :  that  tba  Cotton  Belt  ahall  protect  and 
ladnanlfy  the  Valley  Terminal  from  and  aBalnst  any  and  all  claims  for  damagei:  that 
thi  VaUay  Terminal  aball  acqolre  In  Ita  own  name  aach  lands  and  other  pniperty  and 
(oastrnct  sncb  additional  tru±a  and  sttnetnrea  aa  may  hereafter  be  toani  necaasary,  all  of 
wUeh  ibaU  be  tnclndcd  In  tbe  leaaa,  the  Cotton  Bait  to  provide  the  necesaary  tundH  and 
ti  pay  tbe  Intcrcat  required  to  be  paid  thereon;  and  tbat  apon  the  eftectlTO  date  of  the 
laat  tbe  Cotton  Btf  t  aball  raoetra  aU  et  Oa  corrent  aetata  of  the  Valley  Terminal  ind 
aM*m«  aU  of  tbe  enrrcnt  llaMl'Htf  at  said  company  except  ita  Indebtedneas  to  tba 
Cattoa  Bdt. 

astac. 

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108  INTERSTATE  OOMMBBDfi  COUHIsaON  BBPOBTS. 

has  enabled  tbe  Cotton  Bdtto  perform  more -expeditious  and  ^- 
cient  service  for  the  publia 

The  station  of  the  Cotton  Belt  at  which  freight  to  or  from  St. 
Louis,  Mo.,  is  delivered  or  received  is  in  a  eeotion  known  as  north 
St.  Louis.  Ordinarily  the  movement  between  this  station  and  the 
Valley  Terminal  yards  is  performed  by  the  Terminal  Railroad  Aseo- 
ciatioD  of  St.  Louis  and  its  sabaidiary,  the  Wiggins  Ferry  Company. 
The  service  was  also  perfoiVoed  for  the  Cotton  Belt  by  these  ter- 
minal roads  when  the  former  tised  the  Dnpe-Bixby  yards.  Owing^ 
to  the  increased  facilities  at  the  ViUley  Terminal  yards  and  the 
fact  that  they  are  about  5  miles  nearer  to  East  St.  Louis,  cars  are 
ordinarily  delivered  to  oonnecting  lines  on  the  day  of  arrival  at  the 
yards,  as  against  an  average  of  three  days  to  move  through  tlie 
Dnpo-Bixby  yards.  Service  to  Dallas  and  Fort  Worth,  Tex.,  and 
other  points  in  the  southwest  is  not  only  more  expeditious  but  more 
regular  and  dependable.  The  withdrawal  of  the  Cotton  Belt  from 
the  Dupo-Bixby  yards  has  also  increased  the  facilities  available  to 
the  Missouri  Pacific, 

The  Valley  Terminal  owns  no  locomotives  or  cars.  It  was  con- 
structed to  provide  adequate  terminal  facilities  for  the  Cotter  Belt 
at  East  St.  Louis  and  is  in  no  way  a  parallel  or  competing  railroad. 
The  purpose  of  the  lease  is  tb  avoid  the  inconvenience  add  expense  of 
maintaining  a  separate  operating  fbrce  for  the  Valley  Terminal. 

The  prayer  of  the  application  is  that  we  determine  whether  or 
not  it  is  necessary  for  the  ai^licant»  to  secure  oar  approval  of  the 
lease  dated  March  29, 1920  i  and,  if  such  approval  is  necessary,  tiiat 
we  authorize  and  approve  such  lease. 

Paragraph  (1)  of  section  5  deals  with  the  pooling  of  freight  and 
the  division  of  aggregate  or  net  earnings  of  such  carriera  Under  the 
circumstances  there  described;  paragraph  (2)  deals  with  the  acqui- 
sition by  a  carrier  engaged  io  interstate  commerce  of  the  control 
of  another  such  carrier  "  either  under  a  lease  or  by  the  purchase 
of  stock  or  in  any  other  manner  not  involving  the  consolidation  of 
such  carriers  into  a  single  system  for  ownership  and  operation"; 
and  by  paragraph  (6)  it  is  made  lawful  for  two  or  more  such  car- 
riera to  "  consolidate  their  properties,  or  any  part  thereof,  into  one 
corporation  for  the  ownership,  management,  and  operation  of  the 
properties  theretofore  in  separate  ownership,  management,  and 
operation"  under  the  conditions  there  prescribed.  Paragraph  (8) 
relieves  the  carriers  affected  by  any  order  made  under  the  pre- 
ceding paragraphs  of  the  section  from  the  operation  of  the  "  anti- 
trust laws  "  in  so  far  as  may  be  necessary  to  enable  them  to  do  any- 
thing authorized  or  requind  by  any  onJer  made  onder  and  pur- 
suant to  such  provisions. 

66 1. 0.  a 


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LEABB  0?  TALLBT  TBKUINAL  BT.  109 

It  eemos  eridoit  that  OngieBs  hid  in  QUnd  ft  complete  acheme  of 
regulation  of  contracts  or  otiier  amngenenta  whereby  (me  common 
carrier  BubjetA  to  the  act  mi^b  secure  oonttol  of  another  such  car- 
rier, either  by  canfioUdatioQ  into  one  corporation,  or  in  some  man- 
ner not  involving  such  oonaolidation,  or  whereby  they  Blight  enter 
into  an  agreement  for  the  pooling  of  freight  or  earnings  with  a 
competing  railroad.  In  other  words,  Congress  intended  to  permit 
unified  operation,  evui  if  involving  the  elimination  of  competition, 
where  this  would  be  in  the  public  interest,  and  provided  lor  a 
modification  of  the  antitrust  laws  to  the  extent  necessary  to  effect 
this  purpose,  stating  certain  prerequisitea,  and  imposing  upon  us 
the  duty  of  determining,  after  beani^,  whether  or  not  the  condi- 
tions of  the  section  have  been  or  will  be  fulfilled  and  the  proposed 
arrangement  is  in  the  public  interest.  Without  now  passing  on  the 
question  as  to  whether  the  provisions  of  section  6  are  exclusive  or 
whether  in  cases  where  the  right  and  power  to  consolidate  or  lease 
existed  prior  to  the  passage  of  the  act  such  right  continues  and  it  is 
not  necessary  to  comply  with  section  5,  we  think  in  the  case  before 
us  it  is  proper  to  take  jurisdiction.  The  evidence  shows  that  at  the 
present  time  the  operation  of  the  property  of  the  Valley  Terminal  by 
the  Cotton  Belt  is  in  the  public  interest. 

On  the  other  hand,  while  the  specific  term  named  by  the  lease  is 
only  for  two  years  from  March  1,  1920,  the  lease  is  by  its  terms  to 
continue  in  effect  until  terminated  by  the  mutual  agreement  in 
writing  of  the  parties.  This  provision  introduces  an  element  of 
indefiniteness  beyond  the  period  of  two  years  which  renders  uncer- 
tain the  time  of  the  lease  which  may  be  relatively  long  or  short, 
dependent  upon  the  future  understanding  of  the  parties. 

Upon  consideration  of  the  record,  we  are  of  opinion  and  find  that 
the  acquisition  for  the  period  of  two  years  from  March  1,  1920,  by 
the  Cotton  Belt  of  control  of  the  Valley  Terminal  under  the  lease 
submitted  for  approval  will  be  in  the  public  interest,  and  authorize 
and  approve  such  acquisition.  We  do  not  approve  the  provision  for 
indefinite  continued  operation  after  the  two-year  period.  The  appli- 
cant carriers  should,  in  season  for  a  proper  consideration,  submit  a 
supplemental  application  for  such  supplemental  order  under  section 
5  as  is  deemed  necessary  or  appropriate  if  they  desire  to  extend  the 
term  of  the  lease  beyond  the  period  herein  approved. 

An  appropriate  order  will  be  entered. 

ORDER. 

A  hearing  having  been  held  on  this  application,  and  full  investi- 
gation of  the  matters  and  things  involved  therein  having  been  had, 
and  the  said  Division  having,  on  the  date  hereof,  made  and  filed  a 


3d  by  Google 


110  INTERSTATB  COHHKBOS  COHIOBEIOH  BEPOBTS. 

report  containing  its  findings  of  fact  and  coodosionB  thereon,  i^ich 
said  report  is  hereby  referred  to  and  made  a  part  hereof : 

It  u  ordered,  Tlutt  the  acquisition  by  tbe  St.  Lonis  Southwestern 
Railway  Company  of  control  of  the  Valley  Tenninal  in  accordance 
with  the  provisions  of  the  lease  submitted  for  approval  by  the  Inter- 
state  Commerce  Commission  is  approved  for  a  period  of  two  years 
from  March  1, 1920. 

It  is  further  ordered.  That  copies  of  tiiis  report  and  order  be 
served  upon  the  applicant  carriers,  that  copies  be  sent  by  registered 
mail  to  tbe  governor  of  the  state  of  Illinois  and  to  the  Public  Utili- 
ties Commission  of  lUinois,  and  that  a  copy  be  deposited  in  the  office 
of  tbe  Commission's  secretary  at  Washington,  D.  0. 

esLca 


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noxB  isstm  of  nobfolk  *  fobishouth  belt  unb  b.  b.   Ill 


Finance  Docket  No.  14. 

IN  THE  MATTES  OF  THE  APPLICATION  OF  THE  NOR- 
FOLK  &  PORTSMOUTH  BELT  LINE  RAILROAD  COM- 
PANY FOR  AUTHORITY  TO  ISSUE  A  NOTE. 


BvbmUted  Avgtut  11,  19tO.    DwMed  Aimvt  IS,  lOtO. 


Anthoritf  granted  for  Uie  Uaue,  as  of  Jn\y  IS,  1920,  of  s  ooe-rear  6  per  c&kt 
note  for  (160,000. 

Thomas  H.  WUcoai  for  applicant. 

Rbfobt  and  Ordeb  of  thb  Commibsion. 
Division  4,  CoumissionehS  Meteb,  Daniels,  Eastman,  and  Potteb. 
Bt  Division  4 : 

It  appearing.  That  the  Norfolk  &  Portsmouth  Belt  Line  Railroad 
Company,  a  common  carrier  by  railroad  engaged  in  interstate  com- 
merce, has  applied  to  this  Commission  under  section  20a  of  the  inter- 
state commerce  act  for  an  order  authorizing  it  to  issue  its  promissory 
note  for  $150,000,  to  be  dated  July  16,  1920,  and  to  mature  one  year 
from  the  date  thereof,  payable  to  the  Norfolk  National  Bank,  of 
Norfolk,  Va.,  or  order,  and  bearing  interest  at  the  rate  of  6  per  cent 
per  annum,  in  order  to  renew  a  note  issued  by  the  applicant  July  16, 
1917,  payable  three  years  thereafter  to  the  same  payee  in  the  same 
amount ;  and 

It  further  appearing,  That  said  application  was  made  in  such  form 
and  contained  such  matters  as  the  Commission  prescribed  and  that  it 
was  made  under  oath,  signed,  and  filed  on  behalf  of  said  carrier  by 
one  of  its  executive  officers  duly  designated  for  that  purpose  by  the 
carrier;  and 

It  further  appeanjig.  That  notice  of  the  filing  of  said  application 
has  been  given  to  and  a  copy  thereof  filed  with  the  governor  of  the 
state  of  Virginia,  the  only  state  in  which  the  applicant  operates,  and 
that  no  objection  to  the  issue  by  this  Commission  of  an  order  grant- 
ing the  application  has  been  offered  by  the  State  Corporation  Com- 
mission or  other  appropriate  state  authority ;  and 

It  further  appearing.  That  the  petition  has  been  duly  heard  and 
submitted,  and  that  full  investigation  of  the  matters  and  things  in- 
volved in  this  proceeding  has  been  had : 

Held,  That  the  proposed  issue  by  the  Norfolk  it,  Portsmouth  Belt 
Line  Railroad  Company  (a)  is  for  a  lawful  object  within  its  corporate 

estao. 


112  INTEBSTATB  COHHEECB  COMMISSION  EBFOBT9. 

purposes,  and  compatible  with  the  public  interest,  which  is  n 
and  appropriate  for  and  consistent  with  the  proper  performance  by 
it  of  service  to  the  public  as  a  common  carrier  and  which  will  not 
impair  its  ability  to  perform  that  service;  and  (6)  ia  reasonably 
necessary  and  appropriate  for  such  purpose ;  and  (c)  that  the  prin- 
cipal amount  of  said  issue,  together  with  all  other  outstanding  notes 
of  a  maturity  of  two  years  or  less  aggregates  more  than  6  per  cent 
of  the  par  value  of  the  secnrities  of  said  Norfolk  A  Portsmouth  Belt 
Line  Kailroad  Company  outstanding  at  date  of  said  application. 

It  is  therefore  ordered,  That  the  applicant  be,  and  it  is  hereby,  au- 
thorized to  issue,  as  of  July  16, 1920,  its  promissory  note  for  a  princi- 
pal amount  of  $150,000,  to  be  dated  July  16, 1920,  and  to  mature  one 
year  from  the  date  thereof,  payable  to  the  Norfolk  Natioilal  Bank 
of  Norfolk,  Va.,  or  order,  and  bearing  interest  at  the  rate  of  6  per 
cent  per  annum,  all  of  which  is  more  fully  set  forth  in  said  applica- 
tion and  in  the  evidence  taken  at  the  hearing  aforementioned. 

It  is  further  ordened,  That  nothing  herein  shall  be  construed  to 
imply  any  guaranty  or  obligation  as  to  said  promissory  noCe.  or 
interest  thereon  on  the  part  of  the  United  States. 

MLaa 


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LOAN  TO  CHIOAGO  *  WBSIBBN  INDIANA  B.  B. 


Finance  Dockft  No.  989. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  CHI- 
CAGO &  WESTERN  INDIANA  RAILROAD  COMPANY 
FOR  A  LOAN  FROM  THE  UNITED  STATES  TO  AID  IN 
MEETING  MATURING  INDEBTEDNESS  AND  IN  MAK- 
ING  ADDITIONS  AND  BETTERMENTS. 


SvbTitUted  June  ZB,  ISiO.    Decked  AMgutt  14,  IStO. 


AppUcatloD  sranted  In  part  and  loon  of  |S,000,000  approved. 

C.  6.  Austin,  jr.^  for  applicant. 

Rkfort  of  the  Cohhission. 
Division  4,  Couuissioners  Meteb,  Eastman,  and  Potter. 
Br  DiviaioN  4; 

The  Chicago  A  Western  Indiana  Railroad  Company,  hereinafter 
called  the  applicant,  is  a  carrier  by  railroad  subject  to  the  inter- 
state commerce  act.  On  May  19,  1920,  it  made  application  to  the 
Interstate  Conunerce  Commission  for  a  loan  from  ^e  United  States 
in  accordance  with  section  210  of  the  transportation  act,  1920,  to 
enable  it  to  meet  its  maturing  indebtedness,  and  to  provide  itself 
with  additions  and  betterments,  and  on  June  26,  1920,  filed  with  the 
Commission  an  amended  and  supplemental  application  pursuant  to 
the  Commission's  announcement  of  June  7,  1920,  of  the  general 
principles  by  which  it  would  be  governed  in  administering  the  fund 
created  by  said  section  of  the  act. 

In  the  application  as  amended  and  supplemented  the  applicant 
sets  forth: 

1.  That  the  amount  of  the  loan  desired  is  $18,000,000. 

2.  That  the  term  for  which  it  is  desired  is  16  years. 

3.  That  the  purposes  and  uses  of  the  loan  are  to  meet  its  maturing 
indebtedness  and  provide  additions  and  betterments  as  follows:  (a) 
To  pay-  applicant's  outstanding  collateral-trust  gold  notes  dated 
September  1,  1917,  due  September  1,  1920,  $16,000,000,  and  {b)  to 
pay  the  total  cost  of  additions,  imprbvements,  and  betterments  aggre- 
gating $2,000,000,  as  follovs: 

Additions  to  boiler  and  air-compressor  capacity  of  power  house  at 
Porty-elghth  street,  Cftlcago,  HI JieiS.OOO 

Betterments  on  wheel  IttheB  at  Flftj-flrst  street  coach  yard.  Obi- 
cago,Ill 11,000 

ea844'— 22— voia 


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114  INTEBSTATE  COMUEBCB  COUMISSION  BBFORIB. 

Enlargement  of  capacity  of  boll»  washout  system  at  Forty-oluth 

street  ronndhouBe,  Chicago,  III $15,000 

Service  bnlldlnga  at  Forty-tiintb  street  ronndbonse  and  Fifty-flrat 

street  coach  yard,  Chicago,  III 30,000 

Locomotive  crane  for  use  at  Belt  railway  shops  at  clearing  yard 21.00n 

Installation  of  automatic  block  signal  on  passenger  tracks  between 

Fifteenth  and  Elghty-arst  streets,  Chicago,  111 , Idl.OOO 

Paym«it  to  Indiana  Hartwr  Belt  Railroad  Company  of  portion  of 
cost  of  enlargement  of  Interlocking  plant  at  crossing  of  Indiana 
Harbor  Belt  Hallway  Company  of  Chicago,  near  West  Plfty-flfth 

street,  Chicago,  lU 38,000 

Payment  to  city  of  Chicago  for  contract  obligation  for  proportion  of 

cost  of  new  Twelfth  street  viaduct,  Chicago,  111 155,0(10 

Miscellaneous  assessments  for  public  Improvements,  such  as  street 

paving,  sewers,  etc.  (two  years) 40,000 

Completion  of  elevated  yard  along  Canal  street  between  Twenty- 
third  and  Twenty-ninth  streets,  Chicago,  111 088, 000 

Construction  of  yard  In  vicinity  of  Chicago  drabiage  canal  for  nse  of 

Belt  Railway  Company  of  Chicago  in  handling  InduBtrlal  business.        300/MO 
Ulscellaneous  additions  and  betterments,  such  as  heavier  rail.  Im- 
proved track  materials,  sidings.  Industrial  connections,  etc 100,000 

Total  additions  and  betterments 2,000,000 

Total  loan  requested 18, 000, 000 

4.  The  pre^nt  and  proBpective  ability  of  the  applicant  to  i«pay 
the  loan  and  meet  the  requirements  of  its  (^ligations  in  that  regftrd. 
fi.  That  the  security  offered  is  applicant's  series-A  5  per  cent  first 
and  refunding  mortgage  bonds  in  the  amount  of  $^,250,000,  issaed 
nnder  its  first  and  refunding  mortgage,  dated  Sept«nber  2, 1912,  and 
supplements  thereto,  due  September  t,  1962. 

6.  Hiat  with  its  present  equipment  and  in  its  present  financial 
status  the  applicant  is  unable  to  meet  the  demands  on  it  for  freight 
tomsportation,  and  that  the  public  convenience  and  necessity  will 
be  served  by  providing  the  aforesaid  additions  and  betterments  which 
will  prevent  congestion  of  important  terminal  fttcilities  at  Chicago, 
111.,  and  by  paying  the  aforesaid  maturing  indebtedness  whidi  will 
prevent  receivership  for  applicant's  property. 

The  application  was  accompanied  by  such  facta  and  details  as  the 
Commission  required  with  respect  to  the  physical  situation,  owner- 
ship, capitalization,  indebtedness,  contract  obligations,  op«vtioD,  and 
earning  power  of  the  applicant,  together  with  such  otiier  favts  relat- 
ing to  the  propriety  and  expediency  of  granting  the  loans  applied 
for,  and  the  abilify  of  the  applicant  to  make  good  Hba  obligation  as 
the  Commission  deemed  pertinent  to  the  inquiry. 

The  applicant,  on  August  12,  1920,  by  its  general  counsel,  C^  G. 
Austin,  jr..  requested  that  consideration  of  a  loan  to  the  applicant  to 
aid  it  in  making  additions  and  betterments  be  deferred. 

wi.o.a 


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LOAN  TO  OHIOAOO  *  WE8TEBN  INDIASA  R.   B.  115 

The  AssocistioQ  of  Bailway  Executiree  bae  reconunended  the  mak- 
ing of  a  loan  of  $8,000,000  to  the  applicant  to  aid  it  in  meeting  iti 
19S0  maturities. 

After  infonnal  hearings  and  inrestigation,  tiw  Commission  finds : 

1.  That  the  making  of  a  loan  of  $8,000,000  to  aid  the  applicant  in 
meeting  its  collateral-trust  gold  notes,  due  b;  extension  September  1, 
1920,  aggregating  $16,000,000,  by  the  United  States,  is  necessary  in 
order  to  enable  the  applicant  properly  to  meet  the  transpwtation 
needs  of  tiie  public  Said  amount  of  $18,000^000  included  as  of  the 
date  of  application,  $680,000  of  notes  due  September  1,  1919,  and  not 
axtended. 

2.  That  the  prospaotive  earning  power  of  the  applicant,  and  char- 
acter and  value  of  the  security  offered,  afford  reasonable  assurance 
of  the  applicant's  ability  to  re^y  the  loan  within  the  time  fixed  there- . 
for,  and  to  meet  its  other  obligations  in  connection  wiUi  such  loan, 
and  reasonable  protection  to  the  United  States;  and 

3.  That  tJie  applicant  is  unable  to  provide  itself  from  other  sources 
with  funds  necessary  for  aforesaid  puxposes. 

A  certificate  will  be  issued  according^. 


( 'ertificat€  No.  IS  for  a  Loan,  under  Section  210  of  th*  Transportation 
Act,  19&},  as  Amended. 

The  Interstate  Commerce  Commission  certifies  to  the  Secretary 
of  the  Treasury  its  findings: 

1.  That  the  making  of  a  loan  of  $8,000,000  by  the  United  Stetes 
to  the  Chicago  &  Western  Indiana  Railroad  Company,  hereinafter 
referred  to  as  the  applicant,  to  aid  it  in  meeting  its  collateral-trust 
gold  notes,  maturing  September  1,  1920,  is  necessary  to  enable  the 
applicant  properly  to  meet  the  transportation  needs  of  the  public. 

2.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  furnish 
reasonable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor  and  to  meet  its  other  obligations  in 
connection  with  such  loan. 

3.  That  the  amount  of  the  loem  which  is  to  be  made  is  $8,000,000. 

4.  That  the  time  from  the  making  thereof  within  which  the  loan 
is  to  be  repaid  is  15  years. 

5.  That  the  terms  and  conditions  of  the  loan,  including  the  se- 
curity to  be  given  for  repayment,  are  as  follows : 

The  loan  is  to  be  evidenced  by  applicant's  note  for  $8,000,000, 
payable  15  years  from  the  making  of  said  loan,  with  interest  at 
the  rate  of  6  per  cent  per  annum,  payable  semiannually,  provided 

es  1.  G.  a 


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116  rNTERSTATE  COMMEBCB  COMMISSION   REPORTS. 

that  if  the  funds  to  be  financed  by  ftpplicant  in  connection  here- 
with from  sources  oUier  than  the  loan  from  the  United  States  shall 
be  financed  for  a  term  of  less  than  IS  years,  the  term  of  the  loan 
from  the  United  States  shall  not  be  longer  than  that  from  ti» 
other  sources. 

The  loan  is  to  be  collaterally  secured  by  the  pledge  of  appli- 
cant's series-A  5  per  cent  first  and  refunding  mortgage  bonds  in  the 
amount  of  $10,500,000. 

The  applicant  shall,  on  demand  of  the  Secretary  of  the  Treasury, 
with  the  concurrence  of  the  Interstate  Commerce  Commission,  de- 
posit such  additional  security  as  may  be  from  time  to  time  re- 
quired; the  securities  pledged,  tc^ther  with  any  that  may  be  pledged 
hereafter,  or  may  have  been  pledged  heretofore,  as  security  for  this 
loan  or  any  other  obligation  of  the  applicant  to  the  United  States, 
for  loans  under  section  210  of  the  transportation  act,  1920,  as 
amended,  shall  be  applicable  in  like  manner  to  secure  the  payment  of 
any  and  all  such  loans  and  advances. 

The  applicant  shall  have  the  privilege  of  paying  the  loan,  or  any 
part  thereof,  with  accrued  interest,  at  any  time  before  maturity. 

The  applicant  shall  finance  $8,000,000,  being  the  remainder  of  the 
aforesaid  maturities  from  other  sources  for  a  period  of  15  years  at 
a  total  cost  to  applicant  of  not  more  than  7}  per  cent  per  annum, 
including  in  such  cost  discount,  attorneys'  fees,  and  any  and  all  other 
expenses  in  connection  therewith,  except  such  as  may  result  from 
redemption  at  not  exceeding  105  under  sinking-fund  provision. 

There  shall  be  filed  with  the  Secretary  of  the  Treasury  the  opinion 
of  counsel  (who  may  be  of  counsel  for  the  applicant)  in  respect  of 
the  security  taken,  which  opinion  shall  show  the  corporate  power  to 
issue,  give,  and  pledge  such  security,  the  proper  exercise  of  said  cor- 
porate power  and  the  validity  of  the  securities  and  of  the  pledge 
thereof.  The  opinion  shall  cover  (o)  the  legality  of  organisation 
and  corporate  power  to  issue,  give,  and  pledge  the  securities;  (6) 
the  legality  of  authorization  of  the  issue  and  pledge  of  the  securi- 
ties; (c)  the  legality  of  the  ii^sue  of  the  securities  and  of  the  pledge 
thereof;  and  {d)  the  validity  of  the  securities  and  of  the  pledge. 

6,  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish,  in  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor  and  reason- 
able prot«ction  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  itself  from  other  sources  with  the  funds  necessary  for  the 
aforesaid  purposes. 

Done  at  Washington,  D.  C.,  this  14th  of  August,  1920. 

■.=..,  Google 


MOIJt  UWUB  OX  PlXTSBUBtiH  A  LUU  JiiUK  B.  B. 


Finance  Docket  No.  20. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  PITTS- 
BUKGH  &  LAKE  ERIE  RAILROAD  COMPANY  FOR 
AUTHORITY  TO  ISSUE  TWO  NOTES. 


Submitted  Juty  SO,  IStO.    Dtxiiei  AMt%M  1 


Antborltf  granted  for  the  iaane  of  two  OO-da;  6  per  ceat  promtssorr  notes  for 
1000,000  and  |426M)0,  respectlvel;,  Id  renewal  of  cntaln  otber  promle- 
aoi7  nolo. 

Reed,  Smith,  Shaw  <S  Beal  for  applicant. 

Report  and  Order  of  the  Cohhission. 
DtngioM  4,  CoMMiaaioNBRS  Mbtbr,  Dahiblb,  Easthan,  and  Potter. 
Bt  DmBiON  4 : 

It  appearinff,  That  the  Pittsburgh  &  Late  Erie  Railroad  Company, 
a  common  carrier  by  railroad  engaged  in  interstate  commerce,  has 
applied  to  this  CommiBsion  under  section  20b  of  the  interstate  com- 
merce act  for  an  order  authorizing  it  to  issue  (1)  a  promiseory  note 
for  $600,000,  to  be  dated  July  19,  1920,  and  to  mature  October  18. 
19iK),  payable  to  the  Fanners  Loan  &  Trust  Company  (of  New  York) 
or  order,  bearing  interest  at  the  rate  of  6  per  cent  per  annum,  and  to 
be  secured  by  the  pledge  of  $500,000  of  4^  per  cent  fourth  liberty 
loan  bonds,  in  order  to  renew  for  the  seventh  time  a  note  issued  by 
the  applicant  October  24,  1918,  to  the  same  payee  and  covered  by 
the  same  security,  and  (2)  a  promissory  note  for  $425,000,  to  be 
dated  Jnly  22,  1920,  and  to  mature  October  20,  1920,  payable  to  tiie 
Union  Trust  Company  of  Pittsburgh  {of  Pittsburgh,  Pa.)  or  order, 
bearing  interest  at  the  rate  of  6  per  cent  per  annum,  and  to  be  secured 
by  tjie  pledge  of  $600,000  of  H  per  cent  fourth  liberty  loan  bonds,  in 
order  to  renew  with  curtailment  for  the  seventh  time  a  note  for 
$500,000  issued  by  the  applicant  Oct<^r  24,  1918,  to  the  same  payee 
and  covered  by  the  same  securi^ ;  and 

It  further  appearinfff  That  said  application  was  made  in  sudi 
form  and  contained  such  nutters  as  the  Commission  prescribed  and 
that  it  was  made  under  oath,  signed,  and  filed  on  behalf  of  said  carrier 
by  one  of  its  ezecntive  officers  having  knowledge  of  the  matters 
therein  set  forth  and  duly  designated  for  that  purpose  by  the 
carrier;  and 

Kii.c.n. 

Digitized  by  L.OOgIC 


lis  INTBBSTATE  OOHUEBCU  COUHISSIOM   HEPOKTS. 

It  further  appearing.  That  notice  of  the  filing  of  said  appUcation 
has  been  given  to  and  a  cop;  thereof  filed  with  the  governor  of  each 
state  in  which  the  applicant  operates,  and  that  no  objection  to  the 
issue  by  this  Commission  of  an  order  granting  the  application  has 
been  offered  by  any  state  authority ;  and 

It  fvrther  appei^-mg.  That  the  petition  has  been  duly  heard  and 
submitted,  and  that  full  investigation  of  the  matters  and  things 
involved  in  this  proceeding  has  been  bad ; 

Beld,  That  the  proposed  issue  by  the  Pittsburgh  A  Lake  Erie 
Railroad  Company  (a)  is  for  a  lawful  object  vithio  its  corporate 
purposes,  and  compatible  with  the  public  interest  which  is  necessary 
and  appropriate  for  and  consistent  with  the  proper  performance  by 
it  of  service  to  the  public  as  a  common  carrier,  and  which  will  not 
impair  its  ability  to  perform  that  service;  and  (b)  is  reasonably 
necessary  and  appropriate  for  that  purpose;  and  (c)  that  the  prin- 
cipal amount  of  said  issue,  together  with  all  other  outstanding  notes 
of  a  maturity  of  two  years  or  less  aggregates  more  than  5  per 
cent  of  the  par  value  of  the  securities  of  the  Pittsburgh  &  hake  Erie 
Railroad  Company  outstanding  at  date  of  said  application. 

It  is  therefore  ordered.  That  the  issue  by  the  applicant  (1)  as  of 
Jnly  19,  1920,.  of  a  promissory  note  for  a  principal  amonnt  of 
$500,000,  to  be  dated  July  19,  1920,  and  to  mature  October  16,  1920. 
payable  to  the  Farmers  Loan  &  Trust  Company  (of  New  York)  or 
order,  bearing  interest  at  the  rate  of  6  per  cent  per  annum,  and  to 
be  secured  by  the  pledge  of  $500,000  of  4^  per  cent  fourth  liberty 
loan  bonds,  and  (2)  as  of  July  22,  1920,  a  promissory  note  for 
$425,000,  to  be  dated  July  22,  1920,  and  to  mature  October  20,  1920, 
payable  to  the  Union  Trust  Company  of  Pittsburg  (of  Pittsburgh. 
Pa.)  or  order,  bearing  interest  at  the  rale  of  6  per  cent  per  annum 
and  to  be  secured  by  the  pledge  of  $600,000  of  4)  per  cent  fourth 
liberty  loan  bonds,  all  of  which  is  more  fully  set  forth  in  said  appli- 
cation as  amended  and  supplemented,  and  in  the  evidence  taken  at 
the  hearing  aforementioned,  be,  and  is  herrtiy,  authorized  and 
approved. 

It  is  further  ordered,  That  as  a  condition  precedent  to  the  isue 
of  the  two  promissory  notee  aforesaid,  aggregating  $925^000,  the 
Pittsburgh  St  Lake  Erie  Railroad  Company  diall  pay  in  cash  to  the 
Union  Trust  Company  of  Pittsburgh  (of  Pittsburi^,  Pa.)  the  sum 
of  $75,000  in  partial  curtailment  of  the  aforesaid  note  for  $500,000, 
issued  October  24,  1918,  which  fell  doe  as  renewed  for  the  sixth 
time  on  July  32, 1920. 

And  ii  it  further  ordered.  That  nothing  herein  shall  he  construed 
to  imply  any  guaranty  or  obligation  as  to  said  promissory  notes,  or 
interest  thereon,  on  the  part  of  the  United  States. 

66 1.  CO. 


MOTE  ISSUB  Of  flTTSBUBOH  A  LAKB  BBIE  B.  B, 


FiSAMOB  Docket  No,  22. 

IN  THE  MATTEB  OF  THE  APPLICATION  OF  THE  PITTS- 
BURGH  &  LAKE  ERIE  RAILROAD  COMPANY  FOB 
AUTHORITY  TO  ISSUE  PROMISSORY  NOTES. 


Submittea  Jvlp.  SO,  1!H0.    Decided  Auguit  20,  1920. 


Aotliorlty  gr«nt«d  (1)  to  towie  a  «  per  cent  promismtr  note  (or  96%,O0O,  par- 
able one  year  after  date  to  tbe  Weatero  TranBlt  Oompanr,  to  be  secored 
b;  pledge  of  certain  bonds  and  to  be  given  in  renewal  ol  a  certain  promis- 
sory note;  and  (2)  to  Issue  unsecured  6  per  cent  promisaor;  notes  aggre- 
gatlDg  $1,500,000,  to  mature  six  months  ufter  dntr,  and  to  be  glveo  in 
renewal  of  certain  other  aotea. 

Reed,  Smithy  Shaw  «&  Beal  for  applicant. 

Rbfobt  and  Okder  or  tbe  Commissios. 
DivisioiT  4,  CoMMiasioNERs  Meteb,  Daniels,  Eastman,  and  Potteh. 
Br  Division  i :  , 

It  appearing.  That  the  Pittsburgh  &,  Lake  Erie  Railroad  Company, 
a  common  carrier  by  raiJroad  engaged  in  interstate  commerce,  has 
applied  to  this  Commission  under  section  20a  of  the  interstate  com- 
merce act  for  an  order  authorizing  it  to  isiiue  (1)  a  promissory  note 
for  the  principal  amount  of  $025,000,  to  be  dated  August  1,  1920, 
and  to  mature  one  year  after  date,  payable  to  the  Western  Tranat 
Company,  a  corporation  organized  under  the  laws  of  New  York,  or 
order,  bearing  interest  at  the  rate  of  6  per  cent  per  annum,  to  be 
secured  by  pledge  of  $1,500,000  of  4^  per  cent  first  and  refunding 
mortgage  bonds,  series  A,  of  the  Monongahela  Railway  Company, 
maturing  January  1,  1967,  in  order  to  renew  a  promissory  note 
issued  by  the  applicant  August  1, 1919,  to  the  same  payee  and  covered 
by  pledge  of  the  same  f^ecurity  (both  hereinbefore  mentioned  in  con- 
nection with  this  application),  which  note,  dated  August  1,  1919, 
constituted  as  to  principal  amount,  the  residue  of  a  promissory  note 
for  $1,000,000  issued,  under  authority  of  resolutions  adopted  by  the 
board  of  directors  of  the  applicant  on  January  19, 1918,  to  secure  cash 
to  replace  that  theretofore  paid  for  additions  and  betterments  made 
to  property  of  the  applicant  in  1917,  and  to  pay  for  equipment 
ordered  by  it,  to  the  same  payee  and  covered  by  pledge  of  the  same 

'»"■''•  .  .Google 


120  INTESBSTATB  COHUBBCE  OOUMISBION   UIFOBTB. 

security  (both  hereinbefore  mentioiied  in  coimectioa  with  this  ap- 
lication),  as  renewed  from  time  to  time  and  curtailed  by  $375^)00; 
(2)  unsecured  promissory  notee  aggregating  $750,000,  and  cmnpris- 
ing  seven  notes  each  for  $100,000  and  one  note  for  ^0,000,  to  be  dated 
August  4, 1920,  and  to  mature  six  months  after  date,  bearing  interest 
at  the  rate  of  6  per  cent  per  annum,  payable  to  the  order  of  the 
applicant  at  the  Unicm  Trust  Company  of  Pittsburgh  (of  Pitts- 
burgh, Pa.) ,  to  be  indorsed  by  the  applicant  and  given  in  renewal  and 
payment  of  notes  of  an  aggregate  principal  amount  of  $760,000 
issued  under  the  authority  of  resolutions  adopted  by  the  board  of 
directors  of  the  applicant  on  January  18,  1918,  to  secure  cash  to 
replace  that  theretofore  paid  for  additions  and  betterments  made  to 
property  of  tjae  applicant  in  1917,  and  for  equipment  ordered  by  it ; 
(S)  unsecured  promiEsory  notes  aggregating  $760,000,  and  compris- 
ing five  notes  each  for  $100,000,  four  notes  eadi  for  $60,000,  and  two 
notes  each  for  $25,000,  to  be  dated  August  26,  1920,  and  to  mature 
six  months  after  date,  bearing  interest  at  the  rate  of  6  per  cent  per 
annum,  payable  to  the  order  of  the  applicant  at  the  Union  Trust 
Company  of  Pittsburgh  (of  Pittsburgh,  Pl),  to  be  indorsed  by  the 
applicant  and  ^ven  in  renewal  and  payment  of  notes  of  an  aggre- 
gate amount  of  $760,000  issued  under  the  authority  of  resolutions 
adopted  by  the  board  of  directors  of  the  applicant  on  January  19, 
1918,  to  secure  cash  to  replace  that  theretofore  paid  for  additions  and 
betterments  made  to  property  of  the  applicant  in  1917,  and  for 
equipment  ordered  by  it;  and 

It  fvrther  appearing.  That  said  application  was  made  in  such  form 
and  contained  such  matters  as  the  Commission  prescribed,  and  that  . 
it  was  made  under  oath,  signed,  and  Hied  on  behalf  of  said  cahrier 
by  one  of  its  executive  officers  having  knowledge  of  the  matters  there- 
in set  forth  and  duly  designated  for  that  purpose  by  the  carrier;  and 

It  further  appearing.  That  notice  of  the  filing  of  said  application 
has  been  given  to,  and  a  copy  thereof  filed  with  the  governor  of  each 
state  in  which  the  applicant  carrier  operates,  and  that  no  objection 
to  the  issue  by  this  Commission  of  an  order  granting  the  application 
has  been  offered  by  the  railroad  commission,  public  service  or  utility 
commission,  or  other  appropriate  state  authority  of  any  of  such 
states; 

And  it  further  appearing.  That  the  petition  has  been  duly  heard 
and  submitted,  and  that  full  investigation  of  the  matters  and  things 
involved  in  this  proceeding  has  been  had ; 

Held,  That  the  proposed  issue  by  the  Pittsburgh  A  Lake  Erie  Bail- 
road  Company  (a)  is  for  a  lawful  object  within  its  corporate  pur* 
poses,  and  compatible  with  the  public  interest,  which  is  necessary  and 
appropriate  for  and  consistent  with  the  proper  performance  by  it 

661.0.0. 


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KOTB   ISSUE  Of  PITTSBURGH   t  LAKE  ERIE  R.   R.  121 

of  service  to  the  public  as  a  common  carrier,  and  which  will  not  im- 
pair its  ability  to  perform  that  service;  and  (&)  is  reasonably  neces- 
sary and  appropriate  for  such  purpose;  and  (c)  that  the  principal 
amount  of  said  issue,  together  with  all  other  outstanding  notes  of  a 
maturity  of  two  years  or  less,  aggregates  moi^  than  6  per  cent  of  the 
par  value  of  the  securities  of  the  Pittsburgh  &  Lake  Erie  Railroad 
Company  outstanding  at  date  of  said  application. 

It  ig  therefore  ordered,  That  the  issue  by  the  applicant,  (1)  as  ot 
August  1,  1920,  of  a  promissory  note  for  a  principal  amount  of 
$626,000,  to  be  dat«d  August  1,  1920,  and  to  mature  one  year  after 
date,  payable  to  the  Western  Transit  Company,  or  order,  bearing 
interest  at  tlie  rate  of  6  per  cent  per  annum,  to  be  secured  by  pledge 
of  $1,600,000,  of  4|  per  cent  first  and  refunding  mortgage  bonds, 
series  A  of  the  Monongahda  Railway  Company,  maturing  January 
1, 1967;  and  (2)  as  of  August  4, 1920,  of  unsecured  pnunissory  notes, 
aggregating  in  principal  amount  $760,000  and  comprising  seven  notes 
each  having  a  principal  amount  of  $100,000  and  one  note  having  a 
principal  amount  of  $50,000,  to  be  dated  August  4,  1920,  and  to  ma- 
ture six  months  after  date,  bearing  interest  at  the  rate  of  6  per  cent 
per  annum,  payable  to  the  order  of  the  applicant  at  the  Union  Trust 
Company  of  Pittsburgh  (of  Pittsburgh,  Fa.),  to  he  indorsed  by  the 
applicant  and  given  in  renewal  and  payment  of  notes  of  an  aggregate 
principal  amount  of  $760,000;  and  (8)  of  prcHnissory  notes  aggre- 
gating in  principal  amount  $750,000,  and  comprising  five  notes  each 
having  a  principal  amoimt  of  $100,000,  four  notes  each  having  a  prin- 
cipal amount  of  $60,000,  and  two  notes  each  having  a  principal 
amount  of  $25,000,  to  be  dated  August  26,  1920,  and  to  mature  six 
months  after  date,  bearing  interest  at  the  rate  of  6  per  cent  per 
annum,  payable  to  the  order  of  the  applicant  at  the  Union  Trust 
Company  of  Pittsburgh  (of  Pittsburgh,  Pa.),  to  be  indorsed  by  the 
applicant  and  given  in  renewal  and  payment  of  notes  of  an  aggre- 
gate principal  amount  of  $760,000,  all  of  which  is  more  fully  set 
fortli  in  said  application  as  amended  and  supplemented  and  in  the 
evidence  taken  at  the  hearing  aforesaid,  be,  and  it  is  hereby,  author- 
ized and  approved,  and 

It  w  further  ordered,  That  nothing  herein  shall  be  c<Histru6d  to 
imply  any  guaranty  or  obligation  as  to  said  promissory  notes,  or  in- 
terest thereon,  on  the  part  of  the  United  States. 

osLca 


D,=;,lz...,C00gIC 


INTKBSIAIE  COUMEUCK  COUMISSION   KKPOBT& 


Finance  Docket  No,  S4. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  LOU- 
ISIANA &  ARKANSAS  RAILWAY  COMPANY  FOK  AV 
THORITY  TO  ISSUE  EQUIPMENT-TRUST  NOTES. 


Sitbmitted  August  9,  1920.    Decided  Aupvtt  tO,  19tO. 


Anthorlt7  granted  for  tbe  Usne  of  eqalpment-tniK  notes  aKgr^otlse  $220,000. 
to  be  payable  ttarougb  h  period  ot  Qve  yean,  to  bear  interest  at  tbe  raU 
of  6  per  cent  per  annum,  and  to  be  issued  under  an  eqnlpment-troEi 
aereemeat  with  tbe  Qnaranty  Trust  Company  of  New  TorK. 
A.  L.  Burford  for  applicant. 

Rkport  and  Obdeb  of  the  Commission. 
Division  4,  Commissionbbs  Meter,  Daniels,  Eabtman,  and  Potteb. 
Bt  Divibion  4 : 

It  appeanng.  That  the  Louisiana  &  Arkansas  Railway  Companji 
a  commun  carrier  by  railroad  engaged  in  interstate  commerce,  has 
made  application  to  us  under  section  20a  of  the  interstate  conunOTce 
act  for  authority  to  issue  equipment-trust  notes  in  a  principal  amount 
aggregating  $220,000  under  an  equipment-trust  agreement  with  tbe 
Guaranty  Trust  Company  of  New  York,  trustee,  dated  March  13, 
1{>20,  said  notes  to  be  payable  through  a  period  of  five  years  and 
bearing  interest  at  the  rate  of  6  per  cent  per  annum,  payable  semi- 
annually, for  the  purpose  of  procuring  the  following-described 
equipment : 


Equipment, 

.„.,, 

Pu«h^ 
priot. 

Cub 

Not* 

ISMN- 

linWotka, 

tiea.m 

»»,6» 
18,177 

I1S0,CII» 

^fSSSr^* 

It  further  appearing,  That  said  application  was  made  in  such  form 
and  contained  such  matters  as  the  Commission  prescribed,  and  that  it 

66 1.  C.  C. 


NOTE  ISSUE  OF  LOUISIANA  ft  ARKANSAS  R¥.  128 

wts  made  imder  oath,  signed,  and  filed  on  behalf  of  said  carrier  by 
one  of  its  encutive  officers  having  knowledge  of  the  matters  ther^ 
mt  forth  and  duly  designated  for  that  purpose  by  the  carrier ;  and 

It  fi»thsr  appearing,  That  notice  of  the  61ing  of  said  application 
has  been  given  to  and  a  copy  thereof  filed  with  the  governors  of  the 
states  of  Arkansas  and  Louisiana,  the  only  states  in  which  the  car- 
rier operates,  and  that  no  objection  to  the  issue  by  this  Conunission 
of  an  order  granting  the  application  has  been  offered  by  the  rail- 
road, public  service,  or  utUitiee  oommissioa,  or  other  proper  state 
authority  of  any  of  said  states;  and 

It  further  appearing.  That  full  investigation  of  the  matters  and 
things  involved  in  this  proceeding  has  been  had : 

Held,  That  the  proposed  issue  of  equipment-trust  notes  (a)  is  for 
a  lawful  object  within  the  corporate  purposes  of  the  Louisiana  & 
Arkansas  Bailway  Company,  and  compatible  with  the  public  inter- 
est, which  is  necessary  and  appropriate  for  and  consistent  with  the 
proper  performance  by  it  of  service  to  the  public  as  a  common  car- 
rier, and  which  will  not  impair  its  ability  to  perform  that  servico; 
and  (6)  is  reasonably  necessary  and  appropriate  for  such  purpose: 

It  i»  therefore  ordered.  That  the  Louisiana  &  Arkansas  Railway 
Company  be,  and  it  is  hereby,  authorized  to.  issue  equipment-trust 
notes,  to  be  known  as  series  D  for  a  principal  amount  not  exceeding 
$180,000,  series  E  for  a  principal  amount  not  exceeding  $40,000,  and 
series  F  for  a  principal  amount  not  exceeding  $60,000,  aggregating 
a  principal  amount  not  exceeding  ^20,000,  maturing  aerially  in  ^m 
six  months  to  five  years  after  date,  and  bearing  interest  at  the  rate 
of  6  per  cent  per  annum,  payable  semiannually,  said  notes  to  be  used 
at  not  less  than  par  in  procurement  of  equipment  in  accordance  with 
a  certain  agreement,  dated  March  IS,  1920,  between  the  Guaranty 
Trust  Company  of  New  York,  trustee,  and  the  applicant,  a  copy  of 
which  agreement  has  been  61ed  with  the  record  herein,  and  said  notes 
with  coupons  attached  covering  the  semiannual  interest  to  be  issued 
in  the  form  set  forth  in  said  agreement,  which  form  of  note  and 
coupon  is  hereby  approved. 

/;  is  further  ordered,  That  nothing  herein  shall  be  construed  to 
imply  any  guaranty  or  obligation  as  to  said  notes,  or  interest  thereon, 
on  the  part  of  the  United  States;  and 

It  M  further  ordered.  That  this  order  shall  take  effect  on  the  20th 
day  of  August,  A.  D.  1920,  and  continue  in  force  until  otherwise 
ordered  by  the  Commission. 

esLCa 


D,=;,lz...,C00gIC 


INT£E3TATE  UOUMEOCJil  UOUUlSSiOK   B&PORTS. 


Finance  Docket  No.  21. 

IN  THE  MATTER  OF  THE  APPLICATION  6P  THE  PITTS- 
BURGH &  WEST  VIRGINIA  RAILWAY  COMPANY  FOB 
AUTHORITY  TO  ACQUIRE  CONTROL  OF  THE  WEST 
SIDE  BELT  RAILROAD  COMPANY. 


Bvbmtttetl  Augual  i,  19i0.    Zteotded  Augtut  tS,  I9t0. 

AcQDisltion  b;  tlie  Plttsbargh  &  West  Vlrglola  Ballwa;  Gompaoy  of  control 
of  tile  West  Side  Belt  Railroad  Company  b7  purchase  of  Ita  capital  ttock 
approved  and  aatborlzed. 

Arthur  H.  Fan  Bnmt  and  John  S.  Wendt  tor  applicant 
Repost  ans  Obdeb  or  the  CoMUisaioN. 
Division  4,  Commishioness  Eastican  and  Potteb. 
Bt  DivtBioN  4 : 

It  appearing,  That  the  Pittsburgh  &  West  Virginia  Railway  Com- 
pany, a  common  carrier  by  railroad  engaged  in  intersta^  commerce, 
haa  applied  to  this  Commission  under  section  5  of  the  interstate 
commerce  act  for  an  order  authorizing  it  to  acquire  21,300  shares, 
par  value  $1,065,000,  of  the  capital  stock  of  the  West  Side  Belt  Bail- 
road  Company,  a  common  carrier  by  railroad  engaged  in  interstate 
commerce,  by  the  payment  of  $50,000  to  the  Pittsburgh  Terminal 
Railroad  &  Coal  Company,  a  Pennsylvania  corporation,  owning 
developed  coal-mine  lands  in  Allegheny  county,  Pa.,  and  engaged  in 
mining  coal,  and  the  present  owner  of  the  stock  aforesaid;  and 

It  further  appearing,  That  the  applicant  controls  the  Pittsburgh 
Terminal  Railroad  &  Coal  Company  through  ownership  of  the  entire 
capital  stock  outstanding,  and  that  the  said  Pittsburg  Terminal  Rail- 
road &  Coal  Company  owns  21,300  shares  of  the  total  outstanding 
capital  stock  of  21,600  shares,  of  which  the  remaining  300  shares  are 
owned  by  the  applicant;  that  the  Pittsburgh  Terminal  Railroad  & 
Coal  Company  entered  into  a  memorandum  of  agreement  with  the 
applicant  under  date  of  April  20,  1920,  whereby  it  covenanted  and 
agreed  to  aell  and  transfer  to  the  applicant  Uie  aforesaid  21,800 
^ares  of  capital  stock  of  the  West  Side  Belt  Railroad  Company 
owned  by  it  as  aforesaid  and  pledged  under  its  first  mortgage  dated 
July  1, 1902,  OD  all  its  proper^,  including  tlie  21,800  shares  of  stock 

6B1.0.C. 


PITTSBURGH  A  W.  VA.  BY.  CONTBOL  OF  W.  8.  B.  B.  R.         125 

aforementioned,  to  the  Colonial  Trust  Company  (of  Pittsburg, 
Pa.)  as  trustee  for  sinking' fund  bonds  maturing  July  1,  1942,  for 
the  sum  of  $50,000,  out  of  which  sum  it  further  covenanted  and 
agreed  to  pay  all  costs,  expenses,  and  charges  necessary  and  proper 
to  effectuate  said  sale  and  transfer  and  to  turn  over  to  the  trustee 
of  said  first  mortgage,  the  said  Colonial  Trust  Company,  the  residue 
of  such  purchase  price  of  $50,000  after  the  payment  of  such  costa, 
expenses,  and  charges,  to  be  applied  by  the  said  trustee  under  said 
mortgage,  and  to  become  part  of  the  sinking  fund  provided  therein; 
and  that  the  holders  of  more  than  60  per  cent  in  value  of  the  Brst- 
mortgage  bonds  of  the  Pittsburgh  Terminal  Railroad  &  Coal  Com- 
pany have  approved  and  authorized  the  sale  of  the  aforesaid  stock 
in  conformity  with  provision  of  the  mortgage  named;  and 

jtt  further  appearing.  That  the  petition  has  been  duly  heard  and 
submitted,  and  that  full  investigation  of  the  matters  and  things 
involved  in  this  proceeding  has  been  had : 

Held,  That  the  proposed  purchase  of  stock  by  the  Pittsburi^  & 
West  Virginia  Railway  Company  («)  will  not  involve  the  consoli- 
dation into  a  sin^e  system  for  ownership  and  operation  of  the  Pitts- 
burgh &  West  Virginia  Railway  Company  and  the  West  Side  Belt 
Railroad  Company,  and  (h)  will  be  in  the  public  interest. 

ft  a  therefore  ordered,  That  the  purchase  by  the  applicant  of  21,300 
shares  of  the  capital  stock  of  thc'West  Side  Belt  Railroad  Company, 
par  value  $1,065,000,  all  of  which  is  more  fully  set  forth  in  the  appli- 
cation as  amended  and  supplemented,  and  in  the  evidence  taken  at 
the  hearing  aforementioned,  be,  and  it  hereby  is,  authorized  and 
approved. 

It  is  further  ordered.  That  within  30  days  after  the  consummation 
of  the  sale  and  transfer  of  stock,  as  prayed  in  the  petition  and  as 
authorized  herein,  the  Pittsburgh  &  West  Virginia  Railway  Com- 
pany shall  cause  the  following  information  to  be  furnished  to  this 
Commission :  (1)  Certified  statement  of  the  stock  transfer,  giving  all 
pertinent  facts;  (3)  statement  of  all  costs,  expenses,  and  charges 
necessary  and  proper  to  effectuate  said  sale  and  transfer;  and  (3) 
amount  of  said  purchase  price  of  stock  paid  over  to  Colonial  Trust 
Company,  as  trustee  of  the  first  mortgage  under  sinking-fund  bonds 
of  the  Pittsburgh  Terminal  Railway  &  Coal  Company. 

It  it  further  ordered,  That  this  order  shall  take  effect  on  the  23d 
day  of  August,  1920,  and  continue  in  force  and  effect  until  otherwise 
ordered  by  the  Commission. 

It  is  further  ordered.  That  nothing  herein  shall  be  construed  to 
imply  any  guaranty  Or  obligation  to  any  of  the  persons  concerned 
in  the  transaction  authorized  by  this  order  on  the  part  of  the  United 
Statai. 
66 1,  o.  a 


ly  Google 


ISTEBSTATE  COMMERCE  COMMISSIOH   KEPOBTS. 


Finance  Docket  No.  8. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  CEN- 
TRAL VERMONT  RAILWAY  COMPANY  FOR  AUTHOR- 
ITY TO  ISSUE  REFUNDING-MORTGAGE  BONDS. 


SubmiUed  Julv  SS,  19m.    Dedded  Augutt  ZS,  1920. 


1.  Autbarltr  granted  bb  of  Jane  28,  1&20,  for  the  inne  of  $12,000,000  of 

refunding-mortgage  5  per  cent  gold  boatls,  dated  May  1, 1920,  to  mature 
May  1,  1930,  to  retire  a  like  amount  of  4  per  cent  flrst-mortgage  gold 
boDds,  due  May  1, 1920,  In  accordance  with  a  certain  trust  Indrature. 

2.  Consideration  of  the  Issue  of  the  remaining  $3,000,000  of  refundlng-mort- 

gage  5  per  cent  bonds  deferred. 

J.  W.  Redmond  and  Edward  C.  BaiU>/  for  appUcant. 
Bbport  of  the  Cokhihoion. 

DmSION   i,  COMMIHSIONBBS   EaSTMAN   AND    PoTTER. 

Br  Division  4: 

The  Central  Vermont  Railway  Company,  a  common  carrier  by 
railroad  engaged  in  interstate  commerce,  seeks  authority  under  sec- 
tion 20a  of  tlie  interstate  commerce  act  to  issue  $15,000,000  of  refund- 
ing-mortgage  gold  bonds,  to  be  dated  May  1, 1920,  to  mature  May  1. 
1930,  and  to  bear  interest  at  the  rate  of  5  per  cent  per  annum.  It 
is  proposed  that  $12,000,000  of  the  said  issue  will  be  used  for  the 
refunding,  par  for  par,  of  an  equal  amount  in  face  value  of  appli- 
cant's 4  per  cent  firBt-mortgage  gold  bonds,  which  matured  May  1, 
1920,  and  that  the  remaining  $3,000,000  will  be  used  "  to  pay  and 
discharge  applicant's  indebtedness  to  the  Grand  Trunk  Company. 
existing  at  the  date  hereof,  and  for  its  other  proper  corporate  pur- 
poses." These  bonds  are  to  be  guaranteed  by  the  Grand  Trunk 
Railway  Company  of  Canada,  hereinafter  called  the  Grand  Trunk, 
both  as  to  principal  and  interest. 

The  applicant  owns  or  controls  a  line  of  railroad,  with  ite  appur- 
tenances and  equipment,  extending  from  the  Canadian  boundary  line 
through  the  states  of  Yermont,  Massachusetts,  and  Connecticut  to 
New  London,  Conn.,  and  thence  a  line  of  boats  to  New  York,  N.  Y. 
A  majority  of  the  stock  of  the  applicant  is  owned  by  the  Grand 
Trunk,  which  has  been  taken  over  by  the  Canadian  gOTemment 
lie  applicant  has  always  been  conducted  as  a  separate  organissation. 

Wl.CC. 


BOKD  ISSUB  OP   CENTRAL  TBBMONT  BT.  127 

Prior  to  Jane  28,  1S90,  the  tUCe  on  which  section  20e  became  ef- 
fective, the  applicant  had  obtained  aothorization  ior  the  proposed 
issue  from  the  Public  Serrioe  Ccmmisaion  of  the  state  of  VennoDt 
and  the  Department  of  Public  UtUitiee  of  the  commonwealth  of 
Massachusetts,  the  only  state  commissions  whose  approval  was  re- 
quired,  and  had  practically  completed  all  steps  necessary  therefor. 
The  mortgage  to  cover  the  proposed  $15,000,000  bond  issue  had  been 
executed,  the  bonds  signed  by  the  proper  officers  of  the  applicant, 
and  a  bondholders'  committee  had  been  authorized,  and  had,  in  fact, 
received  in  trust  for  the  ooaveraon  more  tJian  $10,000^000  of  the 
$12,000,000  which  matured  Slay  1,  1920,  as  before  stated.  Of  this 
$12,000,000,  there  were  outstanding  on  June  28,  1920,  $10,732,000, 
which  were  owned  by  some  8,000  bondholders;  there  were  pledged 
to  secure  obligations  of  the  applicant  $1,226,000,  and  there  were 
$42,000  held  in  the  applicant's  treasury.  The  remaining  $3,000,000 
of  the  proposed  issue  the  applicant  proposes  to  use  in  paying  its 
unsecured  debt  to  the  Grand  Trunk  and  for  additions  and  better- 
ments. 

At  the  hearing  on  July  23,  1020,  counsel  for  the  applicant  urged 
immediate  permission  to  refund  $12,000,000  of  bonds  which  fell  due 
May  1, 1920,  by  a  new  issue,  arrangements  for  which  had  practically 
been  completed,  and  that  the  question  of  permission  to  issue  the 
remaining  $8,000,000  of  the  new  issue  might  for  the  present  be  de- 
ferred. 

Evidence  submitted  disclosed  that  the  applicant's  earnings  were 
barely  sufficient  to  pay  interest  on  its  funded  debt  at  ibei  rate  of  4 
per  cent;  and  that  the  increased  interest  charges,  should  the  applica- 
tion be  approved,  would  be  approximately  $321,000.  On  behalf  of 
the  applicant,  considerable  importance  was  placed  on  the  guaran^ 
by  the  Grand  Trunk  as  to  principal  and  interest.  The  applicant 
submitted  tiiat  the  increased  revenue  from  rate  increases  authorized 
by  us,  togetiier  with  the  increased  tonnage  which  it  has  been  receiving 
since  the  first  of  this  year  and  would  continue  to  receive  from  die 
Grand  Trunk,  due  to  the  consolidation  of  the  railways  of  Canada, 
thereby  giving  it  access  to  some  18,000  miles  of  road  in  Canada,  will 
produce  sufficient  revenue  to  justify  the  issue  of  the  new  bonds  with 
interest  at  5  per  cent.  The  applicant  also  submitted  that  unless  the 
proposed  issue  be  allowed,  at  least  to  the  extent  of  $12,000,000  to 
refund  the  bonds  now  past  due,  a  receivership  might  result. 

Upon  consideration  of  the  record,  we  are  of  opinion  and  find  that 
the  proposed  issue  to  the  extent  of  $12,000,000  by  applicant  (a)  is 
for  a  lawful  object  within  its  corporate  purposes,  and  compatible 
with  the  public  interest,  which  is  necessary  and  appropriate  for  and 
consistent  with  the  proper  performance  by  it  of  service  to  the  public 

66I.C.C. 


d.,  Google 


128  INTERSTATE  COMMERCE  COMMISSION  BBPOHTS. 

as  a  common  carrier,  and  which  will  not  impair  its  abili^  to  perform 
that  service  and  (b)  ts  reasonably  oeeesear;  and  appropriate  for 
such  purpose.    Consideration  of  the  proposed  issue  to  the  otent  of 
the  remaining  $3,000,000  is  deferred. 
An  appropriate  order  will  be  entered. 

ORDER. 

A  hearing  having  been  held  on  this  application,  and  tnTestigation 
of  the  matters  and  things  involved  therein  having  been  had,  and 
the  Baid  Division  having,  on  the  date  hereof,  made  and  filed  a  report 
containing  its  findings  of  fact  and  conclosiona  thereon,  which  said 
report  is  hereby  referred  to  and  made  a  part  hereof: 

//  ia  ordered,  That  the  issue  as  of  Ma;  1,  1920,  by  the  applicant, 
the  Central  Vermont  Railway  Company,  of  $12,000,000  principal 
amount  of  its  refunding-mortgage  gold  bonds,  to  be  dated  May  1, 
1820,  and  to  mature  on  May  1,  1980,  bearing  interest  at  the  rate  of 
5  per  cent  per  annum,  payable  semiannually  on  the  Ist  day  of  iMay 
and  of  November  in  each  year,  subject  to  and  in  accordance  with 
the  terms  and  conditions  of  a  certain  trust  indenture  dated  March 
15,  1920,  and  executed  by  applicant  to  the  New  York  Trust  Com- 
pany, a  New  York  corporation,  as  trustee,  all  of  which  is  more 
fully  set  forth  in  said  application  and  in  said  trust  indenture,  a 
true  copy  of  which  is  on  file  in  this  proceeding,  for  the  sole  pur- 
pose of  retiring,  face  value,  $11,958,000,  being  the  entire  amount  of 
the  applicant's  4  per  cent  first-mortgage  gold  bonds,  due  May  1, 
1920,  issued  under  a  certain  indenture  of  mortgage  and  deed  of 
trust  dated  May  1, 1899,  and  executed  by  the  applicant  to  the  Ameri- 
can Loan  &  Trust  Company,  now  the  American  Trust  Company,  a 
Massachusetts  corporation,  and  $42,000  of  said  bonds  now  in  the 
treasury  of  the  applicant,  be,  and  it  is  hereby,  authorized  and  ap- 
proved. 

It  ia  further  ordered,  That  the  applicant  shall  on  or  before  No- 
vember 1,  1920,  and  each  six  months  thereafter  until  all  of  said 
bonds  hereby  authorized  shall  have  been  issued  in  accordance  with 
this  order,  report  to  this  Commission  in  writing,  signed  by  its  presi- 
dent and  treasurer,  and  verified  by  their  oaths,  the  amount  of  bonds 
so  issued  and  the  disposition  of  the  'same. 

And  it  is  further  ordered.  That  nothing  herein  shall  be  construed 
to  imply  any  guaranty  or  obligation  as  to  said  refunding-mortgage 
gold  bonds,  or  interest  thereon,  on  the  part  of  the  United  States. 

65 1. 0 .  c. 


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SOTB  ISSDB  OF  NOBFOLK  *  POKISUOUTH  BELX  LIMB  B.  B.     129 


Finance  Docket  No.  15. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THF 
NORFOLK  &  PORTSMOUTH  BELT  LINE  RAILROAD 
COMPANY  FOR  AUTHORITY  TO  ISSUE  SHORT-TERM 
NOTE& 


£ti>6milted  August  18,  19»0.    Decided  Augmt  25,  1910. 


Asttaorltr  gnsted  for  ttie  Issue  of  two  6  per  cent  promUaory  notes  In  tbe 
aggregate  amonat  of  $S0,OOO. 

Thomas  B.  WUeoas  for  applicant. 

Report  and  O&deb  or  the  Cohhisbion. 
Division  4,  Cohhisbionbrs  Mbteb,  Danielb,  Eastman,  and  Ponxti. 
Bt  DmBioN  4 : 

It  appearing,  That  the  Norfolk  A  Portsmouth  Belt  Line  Railroad 
Company,  a  common  carrier  b;  railroad  engaged  in  interstate  com> 
merce,  has  made  application  to  this  Commission  under  section  20a 
of  the  interstate  commerce  act  for  authority  to  issue  one  promissory 
note  in  the  principal  amount  of  $35,000,  the  proceeds  to  be  used  for 
the  purpose  of  bulkheading  the  applicant's  property  and  dredging  in 
front  thereof,  at  Sewell's  Point,  Va.,  and  another  promissory  not«  in 
the  principal  amount  of  $15,000,  the  proceeds  thereof  to  be  used  in 
payment  for  rail  and  accessories  needed  for  maintaining  the  appli- 
cant's tracks  in  good  condition ; 

it  further  appearing.  That  said  application  was  made  in  such  form 
and  contained  such  matters  as  the  Commission  prescribed,  and  that 
it  was  made  under  oath,  signed,  and  filed  on  behalf  of  the  carrier 
by  one  of  its  executive  officers  having  knowledge  of  the  matters 
therein  set  forth  and  duly  designated  for  that  purpose  by  the  carrier ; 

It  further  appearing,  That  notice  of  the  filing  of  the  application 
has  been  given  to,  and  a  copy  thereof  filed  with,  the  governor  of 
the  state  of  Virginia,  the  only  state  in  which  the  applicant  operates, 
and  that  no  objection  to  the  issue  by  this  Commission  of  an  order 
granting  the  application  has  been  offered  by  the  State  Corporation 
Commission  of  Virginia,  or  ot^er  authority  of  said  state ; 

It  further  appearing.  That  full  investigation  of  the  matters  and 
things  involved  in  this  proceeding  has  been  had : 

Held,  That  the  proposed  issue  of  notes  by  the  Norfolk  &  Ports- 
mouth Belt  -Line  Railroad  Company  (a)  is  for  a  lawful  object 
«844'— 22— Vol  05 8 


ly  Google 


130  IBTEBSTATB  COMMBBCB  00MMIH8I0H  BBP0BT8. 

within  its  corporate  purposes,  and  compatible  with  the  public  in- 
terest, which  is  necessary  and  appropriate  for  and  consistent  with 
the  proper  performance  by  it  of  service  to  the  public  as  a  common 
carrier,  and  which  will  not  impair  its  ability  to  perform  that  serv- 
ive;  (6)  is  reasonably  necessary  and  appropriate  for  such  purpose; 
and  (e)  that  the  principal  amount  of  said  issue,  together  with  all 
other  outstanding  notes  of  a  maturity  of  two  years  or  less,  aggregate 
more  than  5  per  cent  of  the  par  value  of  the  securities  of  said  Nor- 
folk &  Portsmouth  Belt  Line  Railroad  Company  outstanding  at  the 
date  of  said  application. 

It  ia  therefore  ordered,  That  the  Norfolk  &  Portsmouth  Belt  Line 
Baiiroad  Company  be,  and  it  is  hereby,  authorized  (1)  to  issue,  as 
of  the  date  of  this  order,  one  promissory  note  in  the  principal  amount 
of  $35,000,  payable  to  the  order  of  the  Merchants  &  Farmers  Bank, 
of  Portsmouth,  Va.,  the  proceeds  of  said  promissory  note  to  be  used 
for  the  purpose  of  bulkheading  the  applicant's  property  and  dredg- 
ing in  front  thereof  at  Sewell's  Point,  Va.,  and  (2)  to  issue,  also  as 
of  the  date  of  this  order,  another  promissory  note  in  the  principal 
amount  of  $15,000,  payable  to  the  order  of  the  National  Bank  of 
Commerce  of  Norfolk,  Va.,  the  proceeds  of  said  promissory  note  to 
be  used  in  payment  for  rail  and  accessories  needed  for  maintaining 
applicant's  track  in  good  condition ;  each  of  said  promissory  notes 
to  be  payable  90  days  after  date,  with  the  privilege  of  renewing 
same  for  periods  of  90  days  each,  not  to  exceed  in  all  the  period  of 
one  year,  and  each  of  said  notes  to  bear  interest  at  the  rate  of  6  per  cent 
per  annum,  said  notes  to  be  issued  in  the  form  of  notes  submitted  with 
the  application,  which  forms  of  notes  are  hereby  approved. 

It  ie  further  ordered.  That  the  authorization  herein  granted  is 
conditioned  upon  the  faithful  performance  of  the  following  pro- 
visions: (1)  That  the  proceeds  of  said  promissory  notes  herein  au- 
thorized to  be  issued  shall  not  be  used  for  any  other  purpose  than 
that  specified  in  said  application,  and  (2)  that  said  applicant,  Nor- 
folk &  Portsmouth  Belt  Line  Kailroad  Company,  shall  furnish  to  us 
periodical  statements  showing  all  pertinent  facts  in  connection  with 
the  expenditures  made  from  said  proceeds,  the  first  statement  to  be 
made  60  days  after  date  of  this  order  and  subsequent  statements  to 
be  made  every  60  days  thereafter  until  said  bulkheading  and  dredg- 
ing work  shall  have  been  completed  and  all  needed  rails  and  acces- 
sories shall  have  been  purchased,  or  until  all  proceeds  of  said  notes 
shall  have  been  expended  for  the  purposes  herein  authorized. 

And  it  is  further  ordered,  That  nothing  herein  shall  he  construed 
to  imply  any  guaranty  or  obligation  as  to  aaid  notes,  or  interest 
thereon,  on  tlie  part  of  the  United  States. 

t6L0.a 


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BXTBKSION  CONTEAOIS  OF  EBIE  B.  B. 


FlNANCB  DOOKOT  No.  83. 

IN  THE  MATTER  OF  THE  APPPLICATION  OF  THE  ERIE 
RAILROAD  <;OMPANY  FOR  AUTHORITY  TO  ENTER 
INTO  EXTENSION  CONTRACTS  WITH  HOLDERS  OF 
BONDS. 


SMtmUted  Attffutt  7, 19iO.    DeoUei  Avtritt  iS.  1320. 


Antborlty  gntnted  to  entar  iDto  contmcbi  wttfa  the  holders  of  certain  bonda 
Issued  by  predeceeaor  companies  of  the  applicant,  extending  the  dates  of 
maturities  of  said  bonda  for  periods  of  10  years. 

George  F.  BrovmeU  for  applicant. 

Report  and  Obdeb  of  the  Cohuission. 
DirmoiT  4,  Couhissioitesb  Mbtbr,  Dakisi^  EAsnuif,  and  Poitbb. 
By  Division  4 ; 

It  appearinff,  That  the  Erie  Rsilroad  Company,  a  common  car- 
rier by  railroad  engaged  in  intetstate  commerce,  has  made  applica- 
tion to  this  CommissioD  under  section  20a  of  the  interstate  commerce 
act  for  authority  to  enter  into  contracts  witii  the  holders  of  certain 
maturing  bonds  issued  by  predecessors  in  interest  of  said  Erie  Bail- 
road  Company,  for  the  extension  of  the  dat«s  of  maturity  of  snch 
bonds  for  the  period  of  10  years  from  their  present  maturity  dates, 
as  follows: 


Dnoflplbn  of  bond*. 


HMmltr  ludw  onS" 


N«ir  Yort  «  Srla 
ladCo. 

XiteBaawkrCo... 


merteuB  I  p«r 
toDdsdatadAnl- 


October  I,  t«3D. . 


tut  U,  1U7. 

ConiniLrtiMri  ■  mtttfige 
T  per  oant  bODdi  dsMl 
SapMmbttl.liTO. 

TlntoaoKiUd^^itMrt- 
M*  eoopoD  T  p<rMnt 
nmds  dttid  S^taiD- 


It  further  appeariTig,  That  the  application  was  made  in  such  form 
and  contained  such  matters  as  the  Conmiission  prescribed,  and  that 
it  was  made  under  oath,  signed,  and  filed  on  behalf  of  said  carrier  by 
one  of  its  executive  officers  haring  knowledge  of  the  matters  therein 
set  forth  and  duly  designated  for  that  purpose  by  the  carrier;  and 


ogle 


132  INTEBSTATB  OOMMEBGE  COlCUISaiOlt  BEFOBTS. 

/*  further  appearing.  That  notice  of  the  filing  of  said  application 
has  been  given  to  and  a  copy  thereof  filed  with  the  governors  of  tho 
states  of  New  York,  New  Jersey,  Pennsylvania,  and  Ohio,  the  only 
states  in  which  the  carrier  operates,  and  that  no  objection  to  the 
issue  by  this  Commission  of  an  order  granting  the  application  has 
been  offered  by  the  railroad,  public  service,  or  utilities  commission, 
pr  other'  proper  state  authority  of  any  of  the  states  named ;  and 

It  further  appearvng^  That  full  investigation  of  the  matters  and 
things  involved  in  this  proceeding  has  been  had: 

Held,  Tliat  the  proposed  contracts  for  the  extension  of  the  respec- 
tive dates  of  maturity  of  said  bonds  (o)  are  for  a  lawful  object  within 
the  corporate  purposes  of  the  Erie  Railroad  Company,  and  com- 
patible with  the  public  interest,  which  is  necessary  and  appropriate 
-Ym"  and  consistent  with  the  proper  perfoimance  by  it  of  aervice  to  the 
public'  as  a  common  carrier,  and  which  will  not  impair  its  ability  to 
perform  that  service;  and  (5)  are  reasonably  necessary  and  appro- 
priate for  such  purpose. 

It  is  therefore  orderedy  That  the  Erie  Railroad  Company  be,  and  it 
is  hereby,  authorized  to  enter  into  contracts  with  (Jie  holders  of  the 
following'deseribed  bonds  issued  by  predecessor  companies,  New 
York  &  Erie  Railroad  Company  fourth-mortgage  5  per  cent  bonds, 
dated  August  15,  1857,  and  maturing  October  1,  1920,  amount  out- 
Standing  $2,926,000,  par  value ;  Erie  Railway  Company  consolidated- 
mortgage  7  per  cent  bonds  dated  Sept^nber  1,  1870,  and  maturing 
September  1,  1920,  amount  outstanding  $16,891,000,  par  value;  and 
the  New  York,  Lake  Erie  &  Western  Railroad  Company  first  con- 
solidated mortgage  coupon  7  per  cent  bonds,  dated  September  1, 1878, 
and  maturing  September  1, 1920,  amount  outstanding  $3,699,500,  par 
value,  extending  the  dates  of  maturities  of  said  bonds  for  periods 
of  10  years,  upon  the  terms  and  conditions  as  fully  set  forth  in  the 
forms  of  proposed  contracts  submitted  with  the  application,  which 
forms  are  hereby  approved,  and  which  proposed  contracts  provide, 
in  part,  that  {a)  there  ^all  be  paid  the  sum  of  $142.50  to  the  holder 
of  each  $1,000  bond  of  the  New  York  &  Erie  Railroad  Company  upon 
the  extension  of  the  maturity  date  of  said  bond  to  October  1,  1930 ; 
and  {h)  there  shall  be  paid  the  sum  of  $10  to  the  holder  of  each 
$1,000  bond  of  the  Erie  Railway  Company  upon  the  extension  of  the 
maturity  date  of  said  bond  to  September  1, 1930;  and  (c)  there  shall 
be  paid  the  sum  of  $10  to  the  holder  of  each  $1,000  bond  of  the  Nevr 
York,  Lake  Erie  &  Western  Railroad  Company  upon  the  extension 
of  the  maturity  date  of  said  bond  to  September  1, 1930. 

It  is  further  ordered,  That  the  Erie  Railroad  Company  shall  pur- 
chase extended  bonds  in  order  to  pledge  the  same  for  loans  to  be 
made  by  the  Secretary  of  the  Treasury  pursuant  to  section  210  of  the 


IXXEKaiON   CONTRACTS  OP  EBIB  B.  B.  138 

transportation  act,  1920,  as  amended,  at  a  price  not  in  excess  of  $990, 
plus  accrued  interest,  tor  each  $1,000  extended  Erie  Railway  Com- 
pany consolidated-mortgage  7  per  cent  bond;  $990,  plus  accrued 
intereet,  for  each  $1,000  extended  New  York,  Lake  Erie  &  Western 
Hailroad  Company  first  consolidated  mortgage  7  per  cent  coupon 
bond;  and  $857.60,  plus  accrued  interest,  for  each  $1,000  extended 
New  York  &  Erie  Railroad  Company  fourth-mortgage  5  per  cent 
bond. 

It  M  further  ordered,  Tliat  notiiing  herein  contained  sllall  restrict 
the  railroad  company  from  redeeming  for  cancellation  or  for  pledge 
under  the  requirements  of  presently  existing  mortgages  any  of  said 
bonds  at  the  redemption  prices  provided  for  in  the  extension  contracts 
extending  the  same. 

It  is  further  ordered.  That  nothing  herein  shall  be  construed  to 
imply  any  guaranty  or  obligation  as  to  said  bonds,  or  interest  thereon, 
or  as  to  said  extension  contracts,  on  the  part  of  the  United  States. 

And  it  is  further  ordered,  Tliat  this  order  shall  take  eSFect  on  th« 
2fith  day  of  August,  1920. 


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UITBBSTATB  OOUMESOE  OomOBSIOir  BEFOBIS. 


FncANCB  Docket  No.  954. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  ERIE 
RAILROAD  COMPANY  FOR  A  LOAN  FROM  THE  UNITED 
STATES  TO  AID  IN  MEETING  MATURING  INDEBTED- 
NESS AND  IN  PROVIDING  EQUIPMENT  AND  OTHER 
ADDITIONS  AND  BETTERMENTS. 


BMbmitted  J.tvu«t  9,  IBZO.    Dtoidad  Aiigutt  U,  19t0, 

Application  Knnted  In  part  and  Ioad  ol  18,000,000  approved. 

Oeorge  F.  BrovmeU  for  applicant. 

Repost  of  thb  Commission. 
Division  4,  CoMMnsiONBiiB  Mxsis,  DANnu,  Eastman,  and  Fottbr. 
Bt  Ditibion  4 : 

The  Erie  Railroad  Company,  a  carrier  by  railroad  subject  to  the 
interstate  commerce  act,  hereinafter  referred  to  as  the  applicant, 
on  May  28, 1920,  made  application  to  the  Interstate  Commerce  Com- 
mission for  a  loan  from  the  United  States  in  accordance  with  section 
SIO  of  the  transportation  act,  1920,  and  on  June  19,  June  26,  July 
IS,  and  August  9, 1920,  the  applicant  amended  and  supplemented  its 
application  pursuant  to  the  Commission's  announcement  of  June  7, 
1920,  of  the  general  principles  by  which  it  would  be  governed  in 
•dministering  the  fund  created  by  said  section  of  the  act 

In  the  application,  as  amended  and  supplemented,  the  applicant 
sets  forth : 

1.  That  the  amount  of  the  loan  desired  is  $30,737,680. 

S.  That  the  term  for  which  the  loan  is  desired  is  15  years. 

8.  That  the  purpose  of  the  loan  is  to  provide  new  equipment,  to 
reconstruct  existing  equipment,  to  make  necessary  additions  and  bet- 
terments to  roadway  and  structures,  and  to  meet  maturing  indebt- 
edness. 

4.  That  the  uses  to  which  the  loan  will  be  applied  are  as  shown  in 
the  following  statement : 


Porpa». 

Toul. 

niiM>c«i 

H 

13.7111,000 

m,iK,fai 

^S!-S 

ll,7M,aO 

ia.7a,<m 

•.ni,Tii 

u,iM,ua 

io,m,M» 

LOAK  TO  IBIH  E.  B. 


185 


5.  Its  present  and  prospective  tbUity  to  repay  the  loui  and  m«et 
the  reqoirementa  of  its  obligations  in  that  regard. 

0.  That  the  security  offered  is  as  follows:  (a)  For  additions  to 
roadway  and  structures,  applicant's  refunding  and  improTement 
mortgage  bonds;  (()  for  new  locomotives,  second  lien  under  an 
equipment-trust  agreement;  (o)  for  additions  and  betterments  to 
existing  equipment,  the  equipment  itself  or  the  applicant's  interest 
therein  as  represented  by  the  government's  loan;  (d)  for  $260,000 
requested  by  the  applicant  for  acquisition  of  1,000  all-steel  drop- 
bottom  gondola  cars  and  1,000  steel-frame  single-sheathed  box  cars, 
applicant's  refunding  and  improvement  mortgage  bonds;  and  («) 
for  maturities,  matured  bonds  as  extended,  or  the  applicant's  note, 
collaterally  secured  by  the  said  matured  bonds,  as  extended. 

7.  That  the  public  convenience  and  necessity  will  be  served  by  the 
loan  in  that  it  wilt  enable  the  applicant  to  provide  itself  with  addi- 
tional equipment  and  other  additions  and  betterments  which  will 
expedite  the  movement  of  trains,  and  also,  in  that  the  loan  will  assist 
the  applicant  in  meeting  its  nuiturities,  thereby  restoring  its  credit. 

Said  application  was  accompanied  by  such  facts  and  details  as  Uie 
Commission  required  with  respect  to  the  physical  situation,  owner- 
ship, capitalization,  indebtedness,  contract  obligations,  operation,  and 
earning  power  of  the  applicant,  together  with  such  other  facts  relat- 
ing to  the  propriety  and  expediency  of  granting  the  loan  applied  for 
and  the  ability  of  the  applicant  to  make  good  the  obligation,  as  the 
Commission  deemed  pertinent  to  the  inquiry. 

The  applicant,  on  August  13,  1920,  by  its  vice  president  and  gen- 
eral counsel,  George  F.  Brownell,  requested  orally  that  consideration 
be  given  to  its  application  in  so  far  as  it  related  to  a  loan  to  aid  the 
applicant  in  meeting  its  1920  maturities,  without  waiting  for  con- 
sideration of  the  remaining  matters  contained  in  its  appUcation. 

The  Association  of  Railway  Executives  recommended  the  making 
of  a  loan  of  $5,879,125  to  the  applicant  to  aid  it  in  meeting  its  matur- 
ing obligations. 

After  informal  hearings  and  investigation,  the  CommissitHi  finds 
that  the  making  in  part  of  the  proposed  loan  to  aid  the  applicant 
to  meet  its  1920  maturities — 


Total. 

-^ 

Si? 

W9,B9l,0OO 

s,an,ioo 
3,m.m 

d>t»d  mar((ig<  coupon  I  per  cent  bonds,  doe  Sspumber  l, 

Tottd    . 

is,us.m 

»lS,iM.SI» 

esi.cc. 

185  INTEBSTATB  OOMHSBOX  COHUISSIOH  BBPORTS. 

by  the  United  States  for  the  ftforesaid  purposes  is  necessary  in  order 
to  enable  the  applicant  properly  to  meet  the  transportation  needs  of 
the  public ;  that  the  prospective  eaniing  power  of  the  applicant,  and 
the  character  and  value  of  the  security  offered,  affonl  reasonable 
assurance  of  the  applicant's  ability  to  repay  the  loan  within  the  time 
fixed  therefor,  and  to  meet  its  oUier  obligations  in  connection  with 
such  loan,  and  reasonable  protecticm  to  the  United  States ;  and  that 
the  applicant  is  unable  to  provide  itself  frton  other  sources  with 
funds  necessary  for  the  afor^aid  purposesL 
An  appropriate  certificate  will  be  issued. 


Amended  Certificate  No.  19  for  a  Loan  under  Section  SiO  of  the 
Transportation  Act,  ISSO,  as  Amended. 

The  Interstate  Commerce  Commission  certifies  to  the  Secretary  of 
the  Treasury  its  findings: 

1.  That  the  making  of  a  loan  of  $8,000,000  by  tite  United  States  to 
the  Erie  RaUroad  Company,  hereinafter  referred  to  as  the  applicant, 
for  the  purpose  of  aiding  the  applicant  to  meet  maturing  indebted- 
ness is  necessary  to  enable  the  applicant  properly  to  meet  the  trans- 
portation needs  of  the  public, 

2.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  furnish  rea- 
sonable assurance  of  the  applicant's  ability  to  repay  the  loan  within 
the  time  fixed  therefor  and  to  meet  its  other  obligations  in  connection 
with  such  loan. 

S.  That  the  total  amount  of  the  loan  which  is  to  be  made  is 
$8,000,000. 

4.  That  the  time  from  the  making  thereof,  within  which  the  loan 
is  to  be  repaid  in  full,  is  10  years. 

5.  That  the  terms  and  conditions  of  the  loan,  and  the  security 
therefor,  shall  be  as  follows :  The  loan  shall  be  made  in  one  install- 
ment of  $8,000,000.  The  note  or  notes  evidencing  the  loan  shall  bear 
interest  at  the  rate  of  6  per  cent  per  annum,  payable  semiannually, 
and  shall  be  collaterally  secured  by  the  pledge  of  the  following  as 
hereinafter  provided :  Erie  Railway  Company  consolidated-mortgage 
7  per  cent  bonds,  due  by  extension  September  1,  1930;  New  Yoi^, 
lake  J!)rie  &  Western  Railroad  Company  first  consolidated  mortgage 
coupon  7  per  cent  bonds  due  by  extension  September  1,  1930 ;  and 
Kew  York  &  Erie  Railroad  Company  fourth-mortgage  5  per  cent 
bonds  due  by  extension  October  1, 1930,  on  the  following  bases:  (a) 
Erie  Railway  Company  consolidated-mortgage  7  per  cent  bonds  due 
by  extension  September  1,  1930,  and  the  Mew  York,  Lake  Erie  & 
Western  Railroad  Company  first  consolidated  mortgage  coupon  7 

66  I.  G.  O. 


LOAV  TO  BBZE  B.  B.  137 

per  oust  bonds  due  by  extension  September  1, 1930;  $1,000  par  value 
of  bonds  for  $1,000  of  loan.  (6)  New  York  &  Erie  Railroad  C<nn- 
pany  fourUi-mortgage  6  per  cent  bonds  due  %  extension  October  1, 
1930 ;  $1,000  par  value  of  bonds  for  $857^  of  loan.  The  bonds  so  to 
be  pledged  to  be  of  sueh  amounte  of  said  issnes,  respectively,  as  may 
be  tendered  by  the  apptieant.  Pending  the  pledge  of  the  extended 
bonds  as  hereinbefore  provided,  the  cash  constituting  the  loan  shall  be 
pledged  as  security  for  Uie  loan,  and  shall  be  released  to  the  appli- 
cant only  as  and  when  and  to  the  extent  the  said  applicant  pledges 
the  extended  bonds,  in  place  of  the  cash,  as  collateral  security  as 
hereinbefore  provided.  The  applicant  shall,  on  demand  of  the  Secre- 
tary of  the  Treasury,  with  the  concurrence  of  Uie  Interstate  Com- 
merce Commission,  depo»t  such  additional  security  as  may  be  from 
time  to  time  required ;  the  securities  pledged,  together  with  any  that 
may  be  pledged  hereafter  or  may  have  been  pledged  heretofore  as 
security  for  this  loan  or  any  other  obligation  of  the  applicant  to  the 
United  States  for  loans  under  section  210  of  the  transportation  act, 
1920,  as  an\ended,  shall  be  applicable  in  like  manner  to  secure  the 
payment  of  any  and  all  such  loans.  The  applicant  shall  have  the 
privilege  of  paying  all  or  any  part  of  the  loan  with  accrued  interest 
at  any  time  before  maturity.  The  securities  pledged  as  collateral 
security  shall  be  released  proportionately  as  parts  of  the  loan  are 
paid.  The  securities  to  be  extended  and  pledged  as  security  for  the 
loan  shall  be  extended  before  the  applicant  shall  have  become  the 
holder  thereof  and  before  they  are  pledged,  and  such  extension  shall 
be  accomplished  as  to  the  Brie  Railway  Company  consolidated-mort- 
gage 7  per  cent  bonds  by  agreement  executed  by  the  Erie  Railroad 
Company  in  temporary  form  attached  hereto,^  marked  **  Exhibit  A,** 
attached  to  each  bond,  for  which  engraved  permanent  agreement  in 
form  attached,  marked  "  Exhibit  B,"  will  be  substituted,  when  pre- 
pared, and  without  expense  to  the  holder,  and  such  extension  shall  be 
accomplished  as  to  the  New  York,  Lake  Erie  &  Western  Railroad 
Company  first  consolidated  mortgage  coupon  7  per  cent  bonds  by 
agreement  executed  by  the  Erie  Railroad  Company  in  temporary 
form  attached  hereto*  and  marked  "Exhibit  0,"  attached  to  each 
bond,  for  which  engraved  permanent  agreements  in  form  attached 
hereto,*  marked  "  Exhibit  D,"  will  be  substituted  when  prepared,  and 
without  expense  to  the  holder,  and  such  extension  shall  be  accom- 
plished as  to  the  New  York  A  Erie  Railroad  Company  fourth-mort- 
gage 5  per  cent  bond  by  agreement  executed  by  the  Erie  Railroad 
Company,  the  temporary  form  attached  hereto  and  marked  "Ex- 
hibit E,"  attached  to  each  bond,  for  which  engraved  permanent 
agreements  in  form  attached  hereto,  marked  "  Exhibit  F,"  will  be 

bat  omltttd  trom  [>Hnte4  report. 

ri.i,ab,GoOgle 


188  INTEBSTATE  001CHBBC9!  OOICHISSIOK  BEPOBTS. 

substituted  wh«n  prepared  and  without  expense  to  .the  holder.  Bonds 
presented  for  pledge  shall  be  accompanied  by  a  statement  of  J.  P. 
Morgan  &  Compan;,  that  the  bonds  so  presented  have  been  extended 
while  held  by  them. 

6.  That  the  proBpective  earning  power  of  the  applicant,,  together 
with  the  character  and  ralue  of  Uie  security  offered,  furnish,  in  the 
opinion  of  the  Commission,  reasonable,  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor,  and  reason- 
able protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  itself  with  the  funds  necessary  for  the  a&resald  purposes 
from  other  sources. 

Done  in  Washington,  D.  C,  this  25th  day  of  August,  1920. 


Diqitzed  by  Google 


LOAir  TO  CttBAI  HOSIHBKN  BT. 


Finance  Dookst  No.  96S. 


IN  THE  MATTER  OF  THE  APPUCATION  OF  THE  GREAT 
NORTHERN  RAHiWAY  COMPANY  FOR  A  LOAN  FROM 
THE  UNITED  STATES  TO  MEET  MATURING  IN- 
DEBTEDNESS AND  TO  PROVIDE  EQUIPMENT  AND 
OTHER  ADDITIONS  AND  BETTERMENTS. 


Approvei  by  the  Commtition,  Divition  4,  Augutt  t5,  XSDO, 


DmiHOH  4,  Coumssiomu  Easthan  Aim  Potteb. 


Amended  Certificate  No.  13  for  a  Loan  under  Section  £10,  of  the 
Transportation  Act,  19S0,  as  Amended. 

The  Interstate  Commerce  CtHnmission  certifies  to  the  Secretary  of 
the  Treasury  its  findings: 

1.  That  the  making  of  a  loan  of  $17^10,000  by  the  United  States 
to  the  Great  Northern  Railway  Company,  hereinafter  referred  to  aa 
the  applicant,  to  aid  it  in  meeting  maturing  indebtedness  consisting 
of  its  three-year  collateral-trust  notes  due  September  1, 1920,  and  for 
the  purpose  of  providing  it  with  equipment  and  other  additions  and 
betterments,  is  necessary  to  enable  the  applicant  properly  to  meet  the 
transportation  needs  of  the  public. 

5.  That  the  prospective  earning  power  of  the  applicant  and  the 
diaracter  and  value  of  the  security  offered  are  such  as  to  furnish  rea- 
sonable assurance  of  the  applicant's  abiUty  to  repay  the  loan  within 
the  time  fixed  tiierefor  and  to  meet  its  other  obligations  in  connec- 
tion with  such  loan. 

8.  Tbat  the  amount  of  the  loan  which  is  to  be  made  is  $17,910,000. 

4.  That  the  time  from  the  making  thereof  within  which  the  loan 
is  to  be  repaid  in  full  is  16  years,  instellmente  to  be  paid  as  herein- 
after indicated. 

6.  That  the  terms  and  oonditions  of  the  loan,  including  the  security 
to  be  given  for  payment,  are  as  follows:  The  loan  is  to  be  divided 
into  three  parte: 

wLaa 


Digiized  by  Google 


140  IKTBBSTATB  OOUUB&CB  OOMUISStOK  BBPOBIS. 

(a)  One  part  to  aid  Id  the  purchase  of  locomotlTes  and  cara f2, 010,000 

(6)  One  part  to  pay  in  part: 

For  strengthening  exisdng  equipment 100,000 

And  other  addltiona  and  bettermenU — ; 800,000 

(c)  One  part  to  aid  In  meetins  maturing  indebtedDeaa 15,000,000 

Total 17,910.000 

That  part  of  the  loan  to  aid  is  the  purchase  of  equipment  (item 
a  hereof)  is  to  be  evidenced  by  the  applicant's  15  notes  for  $134,000 
each,  payable,  respectively,  in  1,  2,  3,  4,  5,  6,  7,  8,  9, 10, 11,  12,  13, 0.4, 
and  15  years  from  the  making  of  said  part  of  the  loan,  with  interest 
at  the  rate  of  6  per  cent  per  anniun,  payable  semiannually. 

The  applicant's  notes  evidencing  the  loan  from  the  United  States 
on  the  aforesaid  equipment  shall  bear  interest,  payable  semiannually, 
at  the  rate  of  6  per  cent  per  annum,  and  shall' be  secured  by  the 
pledge  of  applicant's  equipment  notes  or  car-trust  certificates  in  re- 
spect of  said  equipment,  which  equipment  notes  or  car-tru^t  certifi- 
cates shall  be  secured  by  a  second  lien  on  the  equipment,  subordinate 
only  to  the  first  lien  on  the  said  equipment  to  secure  the  applicant's 
equipment  notes  or  car-trust  <»rti£cates  (for  the  remaindeo'  of  the 
purchase  price)  to  be  sold  or  offered  to  the  public.  The  equipment 
notes  or  car-trust  certificates  pledged  as  coUatoral  security  for  the 
loan  from  the  United  States  on  the  aforesaid  equipment,  shall  be  se- 
cured by  the  same  equipment-trust  indenture  or  agreement  of  condi- 
tional  sale  by  which  the  equipment  notes  or  car-trust  certificates  (for 
the  remainder  of  the  purchase  price)  to  be  sold  or  offered  to  the  public 
are  secured,  and  under  which  tit^e  to  the  equipment  shall  not  pass  to 
the  applicant  nor  from  the  trustee  for  the  benefit  of  the  note  holdecs 
or  certificate  holders  until  the  notes  or  certificates  shall  have  been 
paid  in  full,  and  applicant  shall  have  fulfilled  all  its  obligatioiis  in 
regard  thereto. 

That  part  of  the  loan  to  aid  in  the  making  of  additions  and  bet- 
terments (item  b  hereof)  is  to  be  evidenced  by  the  applicant's  four 
notes  for  $225,000  each,  payable,  respectively,  in  three,  four,  five,  and 
six  years  from  the  making  of  this  part  of  the  loan,  with  interest  at  the 
rate  of  6  per  cent  per  annum,  payable  semiannually. 

That  part  of  the  loan  to  aid  in  meeting  maturing  indebtedness 
(item  c  hereof)  is  to  be  evidenced  by  the  applicant's  note  for 
$15,000,000,  payable  not  more  than  one  year  from  the  making  of  this 
part  of  the  loan  and  not  later  than  September  1, 1921,  with  interest  at 
the  rate  of  6  per  cent  per  annum,  payable  semiannually. 

All  of  said  loans  are  to  be  further  secured  by  the  pledge  as  col- 
lateral security  of  a  total  of  $22,387,000  par  value  of  Great  Northern 
Bailway  Company  first  and  refunding  mortgage  60-year  4^  per  cent 
gold  bonds  due  July  1, 1961.    The  applicant  may  use  for  this  pledge 

6si.aa 

Digitized  by  Google 


LOAN  TO  QRBAT  NOBTHEBN  ST.  141 

Great  Northern  Bailwfty  Company  first  and  refonding  mortgage  SO- 
year  4^  per  «ent  gold  bonds  due  July  1,  1961,  pledged  with  the 
Bankers  Trust  C<mipsny,  New  Y<ak,  under  applicant's  collateral- 
trust  mortgage,  dated  Sept^nber  1,  1917,  maturing  September  1, 
1920,  securing  the  applicant's  maturities  of  $20,000,000,  due  Sep- 
f«mber  1, 1920,  to  aid  in  the  meeting  of  which  ^^lus  loan  to  the  extent 
of  $19,000,000  is  made,  when  and  if  said  first  and  refunding  mortgage 
SO-year  4^  per  cent  gold  bonds  shall  have  been  released  from  the 
pledge  and  lien  afbreeaid.  The  bonds  pledged  as  collateral  security 
shall  be  released  proportionately  as  installmento  are  paid. 

The  applicant  sh&ll  have  the  pririlege  of  paying  any  or  all  install- 
ments or  any  or  all  parts  of  the  loan,  with  accrued  interest,  at  any 
tine  before  maturity. 

As  further  conditions  precedent  to  the  making  of  the  loan,  the 
applieant  shall  agree  (1)  on  demand  of  the  Secretary  of  the  Treasury, 
with  the  concurrence  of  the  Interstate  Commerce  Commission,  to 
deposit  with  him  such  additional  security  as  he  may  from  time  to 
time  require,  and  shall  further  agree  that  the  securities  pledged,  to- 
gether with  any  that  may  be  pledged  hereafter  or  may  have  been 
pledged  heretofore,  as  security  for  this  loan  or  any  other  obligation 
of  the  said  applicant  to  the  United  States  for  loans  under  flection  210 
of  the  transportation  act,  1920,  as  amended,  shall  be  applicable  in 
Wks  manner  to  secure  the  payment  of  any  and  all  such  loans,  and 
(2)  that  if  the  Interstate  Commerce  Commission  shall  certify  to  the 
Secretary  of  the  Treasury  that  the  applicant  has  failed  or  refused 
well  and  truly  to  perform  any  or  all  undertakings  which  it  has  agreed 
to  perform  nnder  the  terms  of  a  certain  agreement  entered  into 
between  said  applicant  and  mid  Interstate  Commerce  Commission, 
dated  the  27th  day  of  August,  1920,  the  whole  or  any  designated  part 
of  the  obligation  of  the  applicant  given  pursuant  to  this  certificate 
upon  recommendation  of  the  said  Interstate  Commerce  Commission, 
shall  mature  at  the  election  of  the  holder  thereof  by  presentation 
thereof  for  payment.  A  copy  of  said  agreonent  is  marked  "Exhibit 
A"  and  annexed  hereto. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish,  in  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor  and  reason- 
able protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinitm  of  the  Commissicai,  is  unable 
to  provide  itself  with  the  funds  necessary  for  the  aforesaid  purposes 
from  other  sonrces. 

Done  at  Washington,  D.  C,  this  27th  day  of  August,  1930. 

6si.o.a 


D,=;,lz...,C00gIC 


142  INTERSTATE  COHUEKCE  COUMISSIOH  BEPORTS. 

Exhibit  A. — Agreement  made  and  entered  into  this  ^tix  day  of 
August,  A.  D.  1920,  by  and  between  Interstate  Commerce  Commia- 
sion  (hereinafter  called  the  "  Commission  "),  and  the  Great  N'orthem 
Bailway  Company,  a  Minnesota  corporation  (hereinafter  called  the 
"  Railway  Company  ") : 

Whzreas  the  Railway  Company  ha«  applied  to  the  Commission 
for  a  loan  of  $28,000^  from  the  United  States  under  and  in 
accordance  with  section  210  of  the  transportation  act,  1680,  as 
amended,  to  meet  its  nuturing  indebtednees  and  to  provide  itself 
with  equipment  and  other  additions  and  bettenneals;  and 

Whekeas  the  Commission  is  about  to  certify  to  tbe  Secretary  of 
the  Treasury  that  the  making  of  a  loan  of  $17,S10/)00  by  the  United 
States  to  the  Railway  Company  for  the  above  purposes  is  neGeasary 
to  enable  the  Railway  Company  to  properly  meet  the  transportation 
needs  of  t^e  public,  said  loan  to  be  divided  into  three  parta  as 
follows : 

(a)  One  part  to  aid  Id  tbe  purchaK  of  locomotives  and  cars $2,010,000 

(6)  One  part  to  pay  in  part: 

For  strengtbening  eziatlng  «qnlpinent_. _-..   flOO.OOO 

And-  other  additions  end  betterments 800,000       900^000 

(o)  One  part  to  aid  In  meeting  maturing  indebtedness , IB,000,000 

Total 17,910,000 

And  Whereas  the  Commission  as  a  prerequisite  to  the  issuance  of 
said  certificate  requires  the  Railway  Company  to  covenant  and  agree 
as  hereinafter  set  forth;  Now,  Tlierefore,  This  Agreement  Wit- 
neeseth: 

The  Railway  Company  as  a  condition  of  and  in  consideration  of 
a  loan  or  loans  to  the  Railway  Company  for  the  purposes  and 
amounts  as  hereinabove  in  the  recital  hereof  set  forth,  does  hereby 
covenant  and  agree: 

(1)  To  expend  on  or  before  July  1,  1921,  or  prior  to  said  date  to 
obligate  itself  to  expend,  that  part  of  the  loan  (or  an  amount  equiva- 
lent thereto  from  the  treasury  of  the  Railway  Company)  made  to 
aid  in  the  construction  and  installation  of  additions  and  betterments 
for  the  purposes  of  and  in  connection  with  the  oonstruction  and 
installation  of  additions  and  bettermente  for  whidi  said  part  of  said 
loan  is  made ;  and  to  furnish  the  Commission  on  or  about  January 
1,  1921,  and  on  or  about  July  1, 1921,  tiie  detailed  certificate,  under 
oath,  of  the  Railway  Company's  chief  engineer  of  the  additions  and 
betterments  made  with  or  in  oonneotion  with  the  funds  provided  by 
that  part  of  the  loan  for  said  purposes ;  also  to  expend  on  or  before 
July  1, 1921,  or  prior  to  said  date  to  obligate  itself  to  expend  upon 
or  in  connection  with  the  ccAstraotion  and  instaUation  of  said  addi- 
tions and  betterments  in  this  paragraph  (1)  referred  to,  a  sum  of 
mone^  raised  or  furnished  by  the  Railway  Company  from  other 

esLca 


£X)AK  TO  GREAT  KOBTHBSN  ST.  143 

sources  for  said  purposes,  equivalent  to  the  amount  loaned  the  Hall- 
way Company  to  aid  in  the  construction  and  installation  of  said 
additions  and  betterments. 

(2)  That  the  amount  to  be  financed  by  the  Bailway  Company  to 
connection  with  the  loan  shall  be  so  financed  that  the  cost  to  the 
Railway  Company  of  any  loans  secured  from  sources  oUier  than  the 
United  States  Government  shall  not  exceed  7  per  cent  per  annum, 
including  in  such  cost  discount,  attorneys'  fees,  and  any  and  all  other 
expenses  in  connection  therewith. 

(8)  That  no  part  of  said  loan  for  additions  and  betterments  shall 
be  used  for  purposes  which  under  the  accounting  regulations  of  the 
Commission  might  or  would  be  chargeable  to  accounts  other  than 
those  prescribed  in  the  present  classification  of  investment  in  road 
and  equipment  of  stesm  roads. 

(4)  That  in  the  event  the  Railway  Company  fails  or  refuses  well 
and  truly  to  perform  any  or  all  of  its  undertakings  herein  contained 
the  Commission  may  certify  to  the  Secretar^r  of  the  Treasury  that 
the  Railway  Company  has  ao  failed  or  refused  well  and  truly  to  per- 
form any  or  all  of  its  said  undertakings,  and  that  upon  receipt  by  thti 
Secretary  of  the  Treasury  of  any  suoh  Commission's  certificate  con- 
taining a  recommendation  that  the  loan  or  any  part  thereof  be  de- 
clared forthwith  due  and  payable  said  loan  or  any  part  thereof  at  the 
election  of  the  holder  or  holders  of  the  note  or  notes  evidencing  said 
loan  shall  forthwith  be  due  and  payable  upon  the  presentation  for 
payment  of  said  note  or  not«s. 

In  Witness  Whereof  the  Railway  Company  has  caused  its  cor- 
porate seal  to  be  hereunto  affixed  and  this  agreement  to  be  signed 
by  its  Vice  President  and  by  its  Assistant  Secretary. 

Gbeat  Nobthbbn  Railway  Compant. 
By  E.  T.  NicHMfl,  Vice  President. 

Attest: 

N.  Tebhttkx,  AtnsttBit  Secretary. 

esLca 


D,=;,lz...,C00gIC 


INTEB5XAIE  OOHH^KTB  OOJUOaSIOH  BEFOBTB. 


Finance  Docket  No  32. 

IN  THE  MATTER  OF  THE  APPUCATION  OF  THE  LOlTG 
ISLAND  RAILROAD  COMPANY  FOB  AUTHORITY  TO 
EXECUTE  AN  EQUIPMENT  TRUST  AND  TO  ISSUE 
UNSECURED  NOTES. 


Submitted  August  16, 19tO.    Dtctded  September  t,  19t9. 


Autboritf  granted  (1)  to  execute  and  deliver  an  agreement  dated  August  1, 1920, 
with  Harry  J.  Moore  and  JoBlah  B.  Bartow  u  vendors,  and  the  FldeHty 
Trust  Company,  of  Philadelphia,  Pa.,  and  WllUBin  P.  Oe«,  of  Merlon, 
Pa.,  as  trustees,  to  t>e  caUed  Long  Island  eqn^ment  tnst,  aeries  0,  and 
a  certain  agreement  of  lease  and  agreement  of  assignment  of  lease  wltb 
said  trustees  by  which  the  applicant  obligates  itself  to  pay  $1,668,000  of 
12-year  equipment-trust  certificates  and  attached  dividend  warrants  to  be 
Issued  thereunder  by  said  trnstees,  and  (2)  to  make  and  deliver  to  said 
trustees  unsecured  6  pet  cent  notes  aggr^ating  9410,279,  to  be  aivlled 
to  procurement  of  the  equipment  set  forth  in  Bald  lease. 

Joseph  F.  Keany  for  applicant. 

Report  av(d  Ordek  or  the  CoxHiagioN. 
Division  4,  Cohmibsionebb  Meter,  Daniels,  Eastman,  and  Potteb. 
Br  DiviaioN  4 ; 

It  appearing.  That  the  Long  Island  Railroad  Company,  a  common 
carrier  by  railroad  engaged  in  interstate  commerce,  has  applied  to 
this  Commission  under  section  20a  of  the  interstate  commerce  act  for 
an  order  authorizing  it  to  execute  and  deliver  a  certain  agreement 
dated  August  1,  1920,  with  Harry  J.  Moore  and  Josiah  B.  Bartow 
as  vendors,  and  the  Fidelity  Trust  Company,  of  Philadelphia,  Pa., 
and  William  P.  Gest,  of  Merion,  Pa.,  us  trustees,  and  a  certain  agree- 
ment of  lease  and  agreement  of  assignment  of  lease  witii  the  Fidelity 
Trust  Company,  of  Philadelphia,  Pa.,  and  William  P.  Gest,  of 
Merion,  Fa.,  trustees,  to  be  called  Long  Island  equipment  trust, 
series  C,  by  and  under  the  terms  of  which  the  Long  Island  Railroad 
Company  obligates  itself  to  pay  $1,688,000,  principal  amount,  of 
12-year  equipment-trust  certificates  and  attached  dividend  warrants 
to  be  issued  thereunder  by  the  trustees  aforesaid,  said  certificates  to 
be  known  as  Long  Island  equipment-trust  certificates,  series  C,  to 
mature  serially,  the  first  series  to  mature  August  1,  1921,  and  the 
remaining  series  on  the  Ist  day  of  August  of  each  year  thereafter, 
respectively,  to  and  including  August  1,  1932,  and  to  be  signed  and 
issued  by  ^e  trustees  aforesaid,  bearing  iotareet  at  the  rate  of  6  per 

esLao. 


EQUIPMENT  TBUBT  OF  LONG  ISLAND  a.   B.  145 

cent  per  innnm,  payable  semiannUBlly  <hi  the  1st  d&y  of  February 
and  of  August  in  each  year,  as  evidenced  by  Raid  attached  dividend 
warrants,  all  as  set  forth  in  said  agreement,  and  to  make  and  de- 
liver to  said  trustees  its  6  per  cent  unsecured  notes  of  the  principal 
amount  of  $419^79,  one-fifth  payable  yearly  during  five  years,  with 
the  privilege  of  deferring  the  first  and  second  payments  until  the 
third  year  at  face  value  and  accrued  interest,  said  equipment-trust 
certificates  and  said  notes  to  be  applied  by  the  trustees  aforesaid  in 
the  procurement  of  the  equipment  set  forth  in  the  lease  aforemen> 
tioned,  as  follows : 

20  MP-M-B  steel   motor  paesenger  cars,  numbered  1678  to  1607, 
UiclusiTe f636, 422 

50  T-54-A  steel  trailer  paBsenger  cats,  numbered  8S7  to  006,  Incluslre.  8611. 492 
80  P-64-C  steel  passenger  cars,  numbered  392  to  421,  inclusive 687, 865 

Total  estimated  coat 2,087,279 

/(  further  appearing,  That  said  application  was  made  in  such 
form  and  contained  such  matters  as  the  Commission  prescribed  and 
that  it  was  under  oath,  signed,  and  filed  on  behalf  of  said  carrier  by 
one  of  its  executive  officers  having  knowledge  of  matters  therein  set 
forth  and  duly  designated  for  that  purpose  by  the  carrier;  and 

It  further  appearing,  That  notice  of  the  filing  of  said  application 
has  been  given  to.  and  a  copy  thereof  filed  with  the  governor  of  the 
state  of  New  York,  the  only  state  in  which  the  applicant  carrier  oper- 
ates, and  that  no  objection  to  the  issuance  by  the  Commission  of  an 
order  granting  the  application  has  been  offered  by  the  public  service 
commission  or  other  appropriate  state  authority  of  said  state ;  and 

ft  further  appearing.  That  the  petition  has  been  duly  heard  and 
submitted,  and  that  full  investigation  of  the  matters  and  things  in- 
volved in  this  proceeding  has  been  had : 

Held,  That  the  proposed  assumption  of  obligation  on  and  under 
the  equipment-trust  certificates  aforesaid  and  the  proposed  issue  of 
notes  by  the  Long  Island  Railroad  (a)  are  for  a  lawful  object  within 
its  corporate  purposes,  and  compatible  with  the  public  interest,  which 
is  necessary  and  appropriate  for  and  consistent  with  the  proper  per- 
formance by  it  of  service  to  the  public  as  a  common  carrier,  and 
which  will  not  impair  its  ability  to  perform  that  service;  and  (6)  are 
reasonably  necessary  and  appropriate  for  such  purpose. 

It  is  therefore  ordered,  That  the  Long  Island  Bailroad  Company 
be,  and  it  is  hereby,  authorized  to  execute  and  deliver  a  certain  agres- 
ment  dated  August  1,  1920,  with  Harry  J.  Moore  and  Josiab  B, 
Bartow  as  vendors,  and  the  Fidelity  Trust  Company,  of  PhiladeJ- 
phia.  Pa.,  and  William  P.  Gest,  of  Merion,  Pa.,  as  trustees,  and  a 
certain  agreement  of  lease  and  agreement  of  assignment  of  lease 
with  the  Fidelity  Trust  Company  of  PhiUdelphia,  Pa^  and  W~.2ian 
66344--?"    '-"-— W 

.t)OgIc 


146  INTEBSTATB  OOUHBBCE  C0HHIS8I0N  BBP0BT8. 

P.  Gest,  of  Merion,  Pa.,  trustees,  to  b«i  called  Long  Island  equipment 
trust,  senes  C,  by  and  under  the  terms  of  which  the  applicant  obli- 
gates iteelf  to  pay  $1,668,000,  principal  amount,  of  12-year  equip- 
ment-trust certificates  and  attached  dividend  warrants  to  be  issued 
thereunder  by  the  trustees  aforesaid,  certificates  to  be  known  as 
Long  Island  equipment-trust  certificates,  series  C,  to  mature  serially, 
the  first  series  to  mature  August  1,  1921,  and  the  remaining  series  on 
the  1st  day  of  August  of  each  year  thereafter,  respectively,  to  and 
including  August  1, 1932,  and  to  be  signed  and  issued  by  the  trustees 
aforesaid,  bearing  interest  at  the  rate  of  6  per  cent  per  annum,  pay- 
able semiannually  on  the  1st  day  of  February  and  of  August  in  each 
year,  as  evidenced  by  said  attached  dividend  warrants,  all  as  set  forth 
in  said  agreement,  and  that  the  form  of  the  aforesaid  agreement, 
agreement  of  lease,  and  agreement  of  assignment  of  lease  filed  in 
this  case  as  exhibit  A  are  hereby  approved,  and  the  applicant  is  far- 
ther authorized  to  indorse  on  each  of  said  certificates  its  guaranty 
for  the  prompt  payment  of  the  principal  thereof  and  interest  thereon. 

It  18  further  ordered,  That  upon  the  execution  and  the  delivery  of 
said  agreement,  agreement  of  lease,  and  agreement  of  assignment  of 
lease  herein  authorized  there  shall  be  filed  with  the  Commission 
verified  copies  of  the  same  in  the  forms  in  which  they  were  executed 
and  delivered,  together  with  an  affidavit  by  the  president  or  other 
executive  officer  of  the  company  stating  that  the  agreement,  agree- 
ment of  lease,  and  agreement  of  assignment  of  lease  as  executed 
and  delivered  are  the  same  as  herein  approved  by  the  Commission. 

It  is  further  ordered,  That  the  said  equipment-trust  certificates  of 
the  principal  amount  of  $1,668,000  shall  be  sold  at  not  less  than  their 
face  value  and  accrued  interest,  to  give  net  proceeds  of  at  least 
$1,668,000. 

It  ts  further  ordered.  That  the  Long  Island  Railroad  Company  be, 
and  it  is  hereby,  authorized  to  make  and  deliver  to  said  trustees 
its  6  per  cent  unsecured  notes  of  the  face  value  of  $419,279,  one-fifth 
payable  yearly  from  date  thereof  during  five  years,  with  the  privilege 
of  deferring  the  first  and  second  payments  until  the  third  year,  at 
face  value  and  accrued  interest. 

It  is  further  ordered,  That  said  equipment-trust  certificates  and 
said  notes  herein  authorized,  of  the  total  face  value  of  $2,087^79  (or 
the  proceeds  thereof),  shall  be  applied  by  said  trustees  solely  and  ex- 
olufflvely  in  payment  for  the  equipment  set  forth  in  the  lease  herein- 
before approved,  as  follows : 

66 1.  CO. 


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mtriFlCElTT  TBTTST  OF  I^OKO  ISUND  B.  B.  147 

20  HP-M-B  Bteel  motor  pasMDger  cars,  numbered  1678  to  1697  In- 

duBlve 1686,422 

50  T-64-A  Meel  trailer  pasnenger  cnrs,  numbered  8S7  to  906,  iDda- 

Blw 868.492 

S  to  421,  Inclusive 687,365 

2.087,278 

It  it  further  ordered.  That  if  the  said  certificates  of  $1,668,000, 
principal  amount,  and  the  not«a  of  a  total  face  value  of  $419^9 
herein  authorized  shall  be  sold  at  such  price  As  to  realize  net  proceeds 
of  more  than  $2,087,279,  no  portion  of  the  proceeds  of  such  sale  in 
excess  of  the  last  aforesaid  sum  shall  be  used  for  any  purpose  with- 
out the  further  order  of  the  Oommissioa. 

It  it  further  ordered.  That  none  of  liie  certificates  and  notes 
herein  authorized  shall  be  hypothecated  or  pledged  as  collateral  un- 
less any  such  pledge  or  hypothecation  shall  have  been  expressly 
approved  and  authorized  by  this  Commission. 

It  it  further  ordered,  That  the  Long  Island  Railroad  Company 
shall  for  each  six  months'  period  ending  June  30  and  December  31 
file,  not  more  than  30  days  from  the  end  of  such  period,  a  verified 
report  showing  (a)  what  certificates  and/or  notes  have  been  sold  or 
otherwise  disposed  of  during  such  period  in  accordance  with  the 
authority  contained  herein;  (&)  the  date  of  such  sale  or  disposition; 
(c)  to  whom  such  certificates  and/or  notes  were  sold ;  (rf)  what  pro- 
ceeds were  realized  from  such  sale;  (c)  any  other  terms  and  condi- 
tions of  such  sale ;  and  (/)  the  amount  expended  in  reasonable  detail 
of  the  proceeds  of  the  certificates  and/or  notes  herein  authorized  for 
the  purpose  specified  herein  during  such  period,  and  stating  to  what 
account  or  accounts  such  expenditures  have  been  charged;  and  con- 
tinue to  file  such  reports  until  all  of  said  certificates  and/or  notes 
shall  have  been  sold  or  disposed  of  and  the  proceeds  expended  In  ac- 
cordance with  the  authority  contained  herein;  and  if  during  any 
period  no  certificate  and/or  notes  were  sold  or  deposed  of  or  prooMds 
expended,  the  report  shall  set  forth  such  fact. 

/*  it  further  ordered.  That  the  applicant  shall  within  80  days  of 
the  service  of  this  order  advise  this  Commission  whether  or  not  it 
accepts  the  same  with  all  its  terms  and  conditions. 

And  it  is  further  ordered,  That  nothing  herein  shall  be  construed 
to  imply  any  guaranty  or  obligation  as  to  said  equipment-trust  certifi- 
cates, or  interest  thereon,  or  as  to  said  notes  or  interest  thereon  on 
the  part  of  the  United  States. 

66l.C.a 


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INTERSTATE  COICHBBOE  OOUHISSIOIT  BEFOftlS. 


FiNANCB   DOCKBT   No.    1023. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  TEBMI- 
HAL  RAILROAD  ASSOCIATION  OF  ST.  LOUIS  FOR  A 
LOAN  FROM  THE  UNITED  STATES  TO  AID  IN  MEET- 
ING MATURING  INDEBTEDNESS  AND  IN  MAKING  AD- 
DITIONS AND  BETTERMENTS. 


Bubmtlted  AuBMt  SI.  IHO.    Decided  Beptemlw  9.  19tO. 


Applicntfon  grsnted  la  part  and  loan  of  (SDe,fl2B  approved. 

C,  A.  Virmedge  for  applicant. 

Report  of  the  CoHHiseioN. 

Division  4,  Comhissiokers  Meter,  Danibu,  and  Eastman. 
By  Division  4 : 

The  Terminal  Rai)road  Association  of  St.  Louis,  a  carrier  by  rail- 
road subject  to  the  interstate  commerce  act,  hereinafter  referred  to 
as  the  applicant,  on  July  24,  1920,  made  application  to  the  Interstate 
Commerce  Commission  for  a  loan  from  the  United  States  in  accord- 
aoce  with  section  310  of  the  transportation  act,  1920,  as  amended. 

Id  said  application  the  applicant  sets  forth : 

1.  That  tJie  amount  of  the  loan  desired  is  $2,759,675. 

2.  That  the  term  for  which  the  loan  is  desired  is  15  years. 

8.  That  the  purpose  of  the  loan  is  to  assist  the  applicant  in  secur- 
ing additions  and  betterments  and  to  pay  maturing  indebtedness  as 
follows : 
Addldona  and  bctt«im«i)ta : 

Keconstructlon  of  upper  roadway,  Dada  bridge .      $66, 600 

ReneirliiK  Esds  bridge  wind  truBscB,  upper  deck 78,  900 

General  Motors  Company  yard 44,  bqq 

Completion  of  Dpper  WlgfilDa  yard 170,  OOO 

Chicago  &  Alton  vtadnct Hj,  ooo 

TentUatlng  flue  from  kitchen,  anion  station _._  3, 000 

ToUet  facilities  and  laTBtorlea,  nclon  station. —. ,_  7, 025 

Bqulpmeot  of  North  Market  street  car-repair  shops 2,SOO 

65  I.  a.  c. 


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LOUT  TO  TERMINAL  B.  B.  ASSO.  149 

Additions  and  bettermenta — Contlnned. 

Blow-oO   and    bot-w&ter    washing    vstema,    iTourteenth    street 

sbc^ . $S2, 000 

Additional  track  on  8t.  Loula  Terminal  Rallwar,  Weat  Belt 109, 290 

Brooklyn  abope  exteneton  and  blow-off  and  bot-water  washing 

systems 4M.700 

Grade  separations  ordered  by  dty  of  St.  Loula 200,000 

Total  additions  and  betterments 1. 248, 075 

Demand  maturities  at  6  per  cent  Interest : 

March  13,  lOia    Mississippi  Valley  Trust  Co 200,  OOO 

June  12,  1918.    Mississippi  Valley  Trust  Co 200,000 

November  iS,  1B19.    MercantUe  Trnat  Oo. t— r~  P^-  ** 

September  16,  1910.    Mercbants-Laclede  NaUonal  Bank 175.  OOO 

March  18,  1919.    Mercbants-Laclede  National  Bank 236, 000 

Total  maturities. 1, 511, 000 

4.  That  the  use  to  which  the  loan  will  be  applied  is  to  assist  appli- 
cant to  make  the  aforesaid  additions  and  betterments  and  to  meet 
the  aforesaid  maturing  indebtedness. 

5.  Its  present  and  prospective  ability  to  repay  the  loan  and  meet 
the  requirements  of  its  obligations  in  that  regard. 

6.  That  the  security  offered  is  $4,682,000  par  value  of  Terminal 
Railroad  Association  of  St.'Louis  general-mortgage  refunding  4  per 
cent  sinking-fund  gold  bonds  dated  January  1,  1903,  and  maturing 
January  1,  1953. 

7.  That  with  its  present  facilities  the  applicant  is  unable  to  meet 
the  demands  on  it  for  freight  transportation,  and  that  the  public 
convenience  and  necessity  will  be  served  by  the  making  of  the  afore- 
said additions  and  betterments  which  will  enable  the  a[^licanC  to 
handle  its  constantly  increasing  traffic,  and  by  the  loan  to  enable 
applicant  to  meet  its  maturing  indebtedness  and  prevent  default 
thereon,  resulting  in  a  receivership. 

The  application  was  accompanied  by  sttch  facts  and  details  as  the 
Commission  required  with  respect  to  the  physical  situation,  owner- 
ship, capitalization,  indebtedness,  contract  obligations,  operation,  and 
earning  power  of  the  applicant,  together  with  such  other  facts  reldt- 
ing  to  the  propriety  and  expediency  of  granting  the  loan  applied  for 
and  the  ability  of  the  applicant  to  make  good  the  obligation  as  the 
Commission  deemed  pertinent  tp  the  inquiry. 

The  Association  of  Railway  Executives  has  approved  the  making 
of  a  loan  to  the  applicant  of  25  per  cent  of  maturing  indebtedness 
and  at  least  50  per  cent  of  additions  and  betterments  to  promote 
the  movement  of  freight-train  equipment. 

After  investigation  the  Commission  finds  that  the  making  in  part 
of  the  proposed  loan — 

«S  1.  G  O.  r--  I 


INTBBSTATB  OOMUBBGB  OOUMISSION  BEFOBTS. 


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by  the  United  States  for  the  aforesaid  purposes  is  necessary  in  order 
to  enable  the  applicant  properly  to  meet  the  transportation  needs   ; 
of  the  public; 

That  the  prospective  earning  power  of  the  applicant  and  character 
and  value  of  the  security  offered  afford  reasonable  assurance  of  the 
applicant's  ability  to  repay  the  loan  within  the  time  fixed  therefor 
and  to  meet  its  other  obligations  in  connection  with  such  loan  and 
reasonable  protection  to  the  United  States ;  and 

That  the  applicant  is  unable  to  provide  itself  with  funds  neces- 
sary for  aforesaid  purposes  from  other  sources. 

An  appropriate  certificate  will  be  issued. 


CffrtifieaU  No.  HO  for  a  Loan  wider  Section  £10  of  the  Tranaportcaion 
Act,  J9B0,  as  Amended. 

The  Interstate  Commerce  Commission  oertifies  to  the  Secretary  of 
the  Treasury  its  findings: 

1.  That  the  making  of  a  loan  of  $896,925  by  the  United  States  to 
the  Terminal  Railroad  Association  of  St.  Louis,  hereinafter  referred 
to  as  the  applicant,  for  the  purposes  of  aiding  applicant  to  make 
additions  and  betterments  and  meet  its  maturing  indebtedness,  is 
necessary  to  enable  the  applicant  properly  to  meet  the  transportation 
needs  of  the  public. 

2.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  furnish 
reasonable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the'  time  fixed  therefor  and  to  meet  its  other  obligations  in 
connection  with  such  loan. 

8.  That  the  amount  of  the  loan  which  is  to  be  made  is  $896,935. 


LOAN  TO  TBBMINAL  B.  R.  ASSO.  161 

4.  That  the  time  from  the  making  thereof,  within  which  the  loan 
is  to  be  repaid  in  full,  is  16  years. 

5.  That  the  terms  and  conditions  of  the  loan,  including  the  security 
to  be  given  for  repayment,  are: 

(a)  The  loan  for  maturities  shall  be  for  $377,760,  maturing  five 
years  from  the  date  thereof.  Prior  to  the  making  of  the  loan  for 
maturities,  the  applicant  shall  finance  effectively,  for  a  term  of  not 
less  thaa  one  year,  at  an  annual  total  cost  to  itself  of  not  exceeding 
7  per  cent,  the  remainder  of  the  demand  notes  held  by  St.  Louis,  Mo., 
banks,  said  remainder  being  as  follows:  Mississippi  Valley  Trust 
Company,  $300,000;  Mercantile  Trust  Company,  $487,300;  Mer- 
chants-Laclede  National  Bank,  $345,750.  The  accomplishment  -  of 
said  financing  shall  be  certified  to  the  Commission  by  the  affidavit  of 
an  executive  officer  of  the  applicant.  The  loan  for  maturities  shftU 
be  collaterally  secured  by  the  following:  Terminal  Kailroad  Associ- 
ation of  St.  Louis  general-mortgage  refunding  4  per  cent  sinking- 
fund  gold  bonds,  dated  January  1,  1903,  and  maturing  January  1, 
1953,  in  the  par  value  of  $697,000.  Said  bonjls  are  of  the  denomina- 
tion of  $1,000  and  are  numbered  as  follows :  27564  to  28^60,  incltisive,  a 
total  of  697  bonds. 

(6)  The  loan  for  additions  and  betterments  shall  be  for  $519,176, 
maturing  15  years  from  the  date  thereof,  and  shall  be  collaterally 
secured  by  the  following:  TerminaL  Eailrosd  Association  of  St. 
Louis  general -mortgage  refunding  4  per  cent  sinking-fund  gold 
bonds,  dated  January  1,  1903,  and  maturing  January  1,  1953,  in  the 
par  value  of  $963,000.  Said  bonds  are  of  the  denomination  of  $1,000 
and  are  numbered  as  follows :  28201  to  28463,  inclusive,  and  24643  to 
24857,  inclusive,  and  28464  to  29008,  inclusive,  a  total  of  963  bonds. 

(<;)  The  applicant  shall,  on  demand  of  the  Secretary  of  the  Treas- 
ury, with  the  concurrence  of  the  Interstate  Commerce  Commission, 
deposit  with  the  Secretary  of  the  Treasury  such  additional  security  as 
may  be  from  time  to  time  required;  the  securities  pledged,  together 
with  any  that  may  be  pledged  hereafter,  or  may  have  been  pledged 
heretofore,  as  security  for  this  loan  or  any  other  obligation  of  the 
said  applicant  to  the  United  States,  for  loans  made  under  section 
210  of  the  transportation  act,  1920,  as  amended,  shall  be  applicable 
in  like  manner  to  secure  the  payment  of  any  and  all  such  loans. 

(d)  Applicant  shall  have  the  privilege  of  paying  all  or  any  part 
of  the  loan  at  any  time  before  maturity. 

{e)  The  collateral  security  for  the  loan  shall  be  released  propor- 
tionately as  parts  of  the  loan  are  paid. 

(/)  In  event  the  Commission  shall  certify  to  the  Secretary  of  the 
Treasury  that  the  applicant  has  failed  well  and  truly  to  comply  with 
any  one  or  more  of  the  terms  and  conditions  contained  in  the  fol- 
lowing subsections  1, 2,  and  3,  the  whole  or  any  part  of  the  loan,  as  the 

65 1.  C.  C. 


152  IKTBRSTATE  COUUBBCl   OOlClCISSIOir  BEPOBTS. 

Commission  may  designate,  shall  become  dne  and  payable.  (1)  The 
cost  to  the  applicant  of  any  loan  which  may  be  secured  from  sources 
other  than  the  United  States,  for  use  in  connection  with  this  loan, 
shall  not  exceed  7  per  cent  per  annum,  including  in  such  cost,  dis- 
counts, attorneys'  fees,  and  any  and  all  other  expenses.  (2)  The 
expenditures  made  from  the  loan  for  additions  and  betterments  shall 
be  confined  to  such  expenditures  as  may  be  chargeable  to  accounts 
for  investment  in  road  and  equipment  provided  in  the  Commission's 
accounting  classifications  of  steam  roads  in  effect  at  the  time  the  ex- 
penditures may  be  made.  (3)  The  applicant  shall  furnish  on  or 
about  January  1,  and  July  1, 1921,  the  detailed  certificates,  under  oath 
of  its  chief  engineer,  showing  the  character  and  cost  of  the  additions 
and  betterments  made  in  connection  with  the  loan  for  said  pur- 
poses. The  loans  for  additions  and  betterments  shall  have  been  ex- 
pended or  definitely  obligated  for  the  purpose  for  which  loaned,  or 
repaid  to  the  United  States,  on  or  before  July  1, 1921. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish,  in  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor  and  reason- 
able protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  itself  with  the  funds  necessary  for  the  aforesaid  pur- 
poses from  other  sources. 

Done  in  Washington,  D.  C,  this  9tb  day  of  September,  1920. 


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CEBIIFIGATES  OF  FABIS  A  UOUNI  FI.BASAST  B.   B. 


FlKANCB  DOCKXT  No.  42. 

IN  THE  MATTER  OF  THE  APPUCATION  OF  THE  RE- 
CEIVER OF  THE  PARIS  A  MOUNT  PLEASANT  RAIL- 
ROAD COMPANY  FOR  AUTHORITY  TO  ISSUE  RE- 
CEIVER'S CERTIFICATES. 


Submitted  Aufrusl  2j,  mO.    Decided  Septevnber  10,  1920. 


Authority  granted  for  Issue  of  receiver's  certiflcates  for  (100,000,  payable  one 
year  from  date  thereof,  with  Interest  at  the  rote  of  8  per  cent. 

Ben  B.  dun  for  applicMtt. 

Report  axd  Obdek  of  the  CouHtsaiON. 
Division  4,  Commissioners  MErea,  Daniels,  Eastman,  and  Potteb. 
Br  Division  4 : 

It  appearing.  That  R.  W.  Wortham,  receiver  of  the  Paris  &  Mount 
Pleasant  Railroad  Company,  a  common  carrier  by  railroad  engaged 
in  interstate  commeroe,  has  applied  to  this  Commis^on  under  section 
20a  of  the  interstate  commerce  act  for  an  order  authorizing  the  issue 
of  receiver's  certificates  in  the  amount  of  $100,000,  said  certificates 
to  be  payable  at  the  office  of  the  receiver  of  the  Paris  &  Mount  Pleas- 
ant Railroad  Company  one  year  from  date  thereof,  with  interest 
thereon  at  the  rate  of  8  per  cent  per  annum,  payable  semiannually,  in 
order  to  enable  said  receiver  to  place  the  line  of  railroad  of  said 
company  in  shape  for  safe  and  economical  operation  by  making  neces- 
sary repairs  to  the  roadway,  station  buildings,  and  equipment  of  the 
carrier;  and 

It  further  appearing,  That  said  R.  W.  Wortham,  receiver  of  the 
Faria  &  Mount  Pleasant  Railroad  Company,  has  heretofore,  by  order 
and  decree  of  the  district  court  of  Lamar  county,  Tex.,  sixth  judicial 
district,  been  authorized  and  empowered  to  issue  receiver's  certifi- 
cates of  indebtedness  to  an  amount  not  exceeding  $100,000; 

It  further  appearing,  That  said  application  was  made  in  such 
form  and  contained  such  matters  as  the  Commission  prescribed,  and 
that  it  was  made  under  oath,  signed,  and  filed  by  said  receiver;  and 

It  further  appearing,  That  notice  of  the  filing  of  said  application 
has  been  given  to  and  a  copy  thereof  filed  with  the  governor  of  the 
state  of  Texas,  the  only  state  in  which  the  applicant  carrier  operates, 
and  that  no.objection  to  the  issuance  by  this  Commission  of  an  order 
granting  the  application  has  been  offered  by  the  Railroad  Commis- 
aion  of  the  state  of  Texas,  and 

It  further  appearing,  That  full  investigation  of  the  matters  and 
things  involved  in  this  application  has  been  had: 

Held,  That  the  proposed  issue  by  R.  W.  Wortham,  receiver  of  the 
Paris  &  Mount  Pleasant  Railroad  Company,  (a)  is  for  a  lawful 

eSLCG. 


154  INTEBSTAXB  OOMMBBOB  OOICUISSION  EBPOBTS. 

object  within  its  corporate  purposes,  and  compatible  with  the  public 
interest,  which  is  necessary  and  appropriate  for  and  consistent  with 
the  proper  performance  by  it  of  service  to  the  public  as  a  common 
carrier,  and  which  will  not  impair  its  ability  to  perform  that  serv- 
ice, and  (b)  is  reasonably  necessary  and  appropriate  for  such  pur- 
pose. 

It  is  therefore  ordered,  That  in  pursuance  of  and  in  accordance 
with  the  order  and  decree  of  court,  dated  July  30  and  entered  July 
31,  1920,  in  T.  D.  Wilson  and  R.  O.  Norria  v.  Parig  <&  Mount  Pleas- 
ant Railroad  Company,  No.  2699,  pending  in  the  district  court  of 
Lamar  county,  Tex,,  sixth  judicial  district,  said  B.  W.  Wortham, 
receiver  of  Paris  &.  Mount  Pleasant  Railroad  Company,  be,  and  he 
is  hereby,  authorized  to  issue,  in  his  capacity  as  receiver  of  said 
Paris  &  Mount  Pleasant  Bailroad  Company,  certificates  of  indebted- 
ness to  an  amount  not  to  exceed  $100,000,  said  certificates  to  be  dis- 
posed of  at  par,  to  be  payable  one  year  aft«r  date,  and  to  bear  in- 
terest at  the  rate  of  B  per  cent  per  annum,  payable  semiannually, 
and  to  be  in  the  form  set  forth  in  the  aforementioned  order  and 
decree,  a  certified  copy  of  which  order  has  been  filed  in  this  pro- 
ceeding, which  form  of  certificate  is  hereby  approved. 

/(  is  further  ordered,  That  the  proceeds  of  said  receiver's  certifi- 
cates shall  be  used,  as  set  forth  in  exhibit  F  accompanying  the 
application,  for  the  following  and  no  other  purposes : 

Account  No.  202,  Roadway  malDtenaace J15, 000 

Accoant  No,  208.  BrldKes,  trestles,  and  culTerta 10, 000 

Account  No.  212.  Ties 40.000 

Account  No.  2ia  Ballast 20,000 

Account  No,  227.  Station  and  offlee  buildinss 5,000 

Account  No.  308.  Steam  locomottvea— Repairs 8,500 

Account  No.  314.  Prelght-train  cars — Repaira 500 

Account  No,  317.  Passenger-trnlD   cars— Repairs 1,000 

Miscellaneous,  iDcludIng  repairs  to  telephone  lines,  water  and  fnel  sta- 
tions, etc 5,000 

and  that  said  R.  W.  Wortham,  receiver  of  the  Paris  and  Mount 
Pleasant  Railroad  Company,  shall  make  periodical  statements  to  this 
Commission  setting  forth  the  purposes  for  which  said  proceeds  have 
been  used,  the  first  statement  to  be  made  60  days  after  the  date  of 
this  order  and  subsequent  statements  to  be  made  every  60  days  there- 
after, until  such  necessary  repairs  to  the  roadway,  station  buildings, 
and  equipment  of  said  carrier  have  been  made  so  as  to  put  the  line 
into  shape  for  safe  and  economical  operation,  or  until  all  of  said 
proceeds  shall  have  been  expended. 

And  it  is  further  ordered.  That  nothing  herein  shall  be  construed 
to  imply  any  gwaranty  or  obligation  as  to  said  receiver's  certificates, 
or  interest  thereon,  on  the  part  of  the  United  States. 

65  Lac. 


D,=;,lz...,C00gIC 


OBBIIFICATES  OF  PABIS  A  MODNT  FLKASAHT  B.  B. 


FiKANCE  Docket  No.  939. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  CHI- 
CAGO &  WESTERN  INDIANA  RAILROAD  COMPANY 
FOR  A  LOAN  FROM  THE  UNITED  STATES  TO  AID  IN 
MEETING  MATURING  INDEBTEDNESS  AND  IN  MAK- 
ING ADDITIONS  AND  BETTERMENTS. 


Approved  bv  the  CommUtton,  DMtion  i,  September  10,  t9f!0. 
Division  4,  Commissionebs  Daniels,  Eastman,  and  Potteb. 


Supplameni(U  Certificate  No.  18  for  a  Loan  under  Section,  SIO  of  the 
Tremaportation  Act,  19^0,  as  Amended. 


The  Interstate  Commerce  Commission,  on  the  14tb  day  of  August, 
1920,  issued  its  certificate  No.  18  approving  the  making  of  a  loan 
under  section  210  of  the  transportation  act,  1920,  as  amended,  to 
the  Chicago  &,  Western  Indiana  Railroad  Company,  hereinafter  re- 
ferred to  as  the  applicant. 

The  Interstate  Commerce  Commission  hereby  supplements  its  said 
certificate  No.  18  and  certifies  to  the  Secretary  of  the  Treasury  its 
further  findings  as  follows : 

1.  The  funds  to  be  financed  by  the  applicant,  in  connection  with 
the  loan,  from  sources  other  than  the  United  States  have  been 
financed  by  the  applicant  for  a  term  of  15  years.  The  term  of  the 
loan  shall  be  15  years. 

2.  The  loan  to  the  applicant  shall  be  collaterally  secured  by  the 
pledge  of  $10,600,000,  par  value,  Chicago  tfi:  Western  Indiana  Rail- 
road Company  series-A  first  and  refunding  mortgage  SO-year  5  per 
cent  gold  bonds,  due  September  2,  1962.  There  may  be  received  for 
this  pledge  Chicago  &  Western  Indiana  Railroad  Company  series-A 
first  and  refunding  mortgage  50-year  6  per  cent  gold  bonds  due  Sep- 
tember 2, 1962,  pledged  with  the  Bankers  Trust  Company,  New  York, 
under  applicant's  collateral-trust  indenture  dated  September  1,  1917, 
securing  applicant's  collateral-trust  gold  notes  of  $15,000,000  due  Sep- 
tember 1,  1918,  and  extended  to  September  1,  1920,  to  aid  in  the 
meeting  of  which  this  loan  to  the  extent  of  $8,000,000  is  made,  when 
and  if  said  first  and  refunding  mortgage  50-year  5  per  cent  gold 
bonds  shall  have  been  released  from  the  pledge  and  lien  aforesaid. 
Said  bonds  in  the  amount  specified   and    under  pledge  with  the 

65  I.  c.  a 


156  IHTEBSTATB  OOUMBBOE  COMMISSION  BEPOBIS. 

Bankers  Trust  Company  under  the  applicant's  collateral-trust  in- 
denture dated  September  1,  1917,  are  in  the  denominations  and 
numbers  as  follows:  One  bond  of  $5,000,000,  No.  16;  Ave  bonds  of 
$1,000,000  each,  Nos.  17,  18,  19,  20,  and  21,  respectively;  and  one 
bond  of  $500,000,  No.  22;  all  of  said  bonds  being  a  part  of  and  desig- 
nated as  series-A  bonds. 

S.  The  applicant  has  financed  $8,000,000,  being  the  remainder  of 
the  maturities,  to  aid  in  the  meeting  of  which  this  loan  is  made, 
at  a  total  cost  to  itself  of  not  more  than  7i  per  cent  per  annum,  in- 
cluding in  such  cost  discount,  attorneys'  fees,  and  any  and  all  other 
expenses  in  connection  therewith,  except  such  as  may  result  from 
redemption  of  bonds  at  not  exceeding  105  under  sinking-fund  pro- 

4.  Certificate  No.  18  contains,  in  paragraph  5,  the  condition  that 
there  shall  be  filed  with  the  Secretary  of  the  Treasury  the  opinion 
of  counsel  (who  may  be  of  counsel  for  the  applicant)  in  respect  of 
the  security  for  the  loan.  Such  opinion  by  C.  G.  Austin,  jr.,  general 
counsel  for  the  applicant,  has  been  filed  with  the  Commission.  Said 
opinion  shows  the  corporate  power  of  the  applicant  to  issue,  give, 
and  pledge  the  security  for  the  loan,  the  proper  exercise  of  said  cor- 
porate power  and  the  validity  of  the  security  and  of  the  pledge 
thereof,  and  is  satisfactory  to  the  Commission.  The  applicant  has 
complied  sufficiently  with  the  aforesaid  condition  of  paragraph  S 
of  certificate  No.  18.  The  duplicate  original  of  said  opinion,  marked 
"  Exhibit  A,"  is  attached  hereto,^ 

Done  in  Washington,  D.  C,  this  10th  day  of  September,  1920. 

'  Filed  wlUi  the  CommlHalon  bui  omitted  from  priDt«d  report 

63 1,  o.  a 


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LOAN  TO  CHICAOO  OBBAT  WBSTBBN  S.  B. 


Finance  Docket  No.  941. 

IN  THE  MATTER  OF  THE  APPUCATION  OF  THE  CHI- 
CAGO GREAT  WESTERN  RAILROAD  COMPANY  FOR  A 
LOAN  FROM  THE  UNITED  STATES  TO  AID  IN  PHOVID- 
ING  NEW  EQUIPMENT  AND  OTHER  ADDITIONS  AND 
BETTERMENTS. 

AppTOvei  bv  tM  Committion,  DMiivn  i,  Beptember  10, 19tO. 


Division  4,  Cohhusionebs  Danieu,  Eastman,  and  Potteb. 


Amended  Certificate  No.  17  for  a  Loan  under  Section  910  of  the 
Transportation  Act,  19£0,  at  Amended. 


The  Interstate  Conunerce  Comiaission  certifies  to  the  Secretary 
of  the  Treasury  its  findings: 

1.  That  the  making  of  a  loan  of  $997,830  by  the  United  States  to 
the  Chicago  Great  Western  Railroad  Company,  hereinafter  referred 
to  as  the  applicant,  for  the  purpose  of  providing  it  with  equipment 
and  other  additions  and  betterments,  is  necessary  to  enable  the  ap- 
plicant properly  to  meet  the  transportation  needs  of  the  public. 

3.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  furnish 
reasonable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor  and  to  meet  it«  other  obligations  in 
connection  with  such  loan. 

3.  That  the  amount  of  the  loan  which  shall  be  made  is  $897,830, 

4.  That  the  time  from  the  making  thereof  within  which  the  loan 
shall  be  repaid  in  full  shall  be  IS  y^rs. 

5.  That  the  terms  and  conditions^of  the  loan,  including  the  security 
to  be  given.for  repayment,  shall  be: 

(a)  The  loan  shall  be  for  $997,880,  matunng  in  16  years  from  the 
date  thereof. 

(b)  Said  loan  ^all  be  secured  to  the  United  States  by  the  pledge 
of  the  applicant's  first-mortgage  4  per  cent  gold  bonds,  due  Sep- 
tember  1, 19S9,  in  the  sum  of  $2,000,000. 

(e)  The  applicant  shall  have  the  privilege  of  paying  any  part  or 
all  of  the  loan  at  any  time  before  maturity.    The  bonds  pledged  as 
collateral  security  shall  be  released  proportionately  as  parts  of  the 
loan  are  paid. 
36I.C.C. 


ly  Google 


168  mXEBSTATE  OOHUERCE  COBCMtSSION  BBFOBTS. 

{d)  The  applicant  shall,  on  demand  of  the  Secretary  of  the  Treas- 
ury, with  the  concurrence  of  the  Interstate  Commerce  CommiBsion, 
deposit  with  the  Secretary  of  the  Treasury  such  additional  security 
as  may  be  from  time  to  time  required;  the  securities  pledged,  to- 
gether with  any  that  may  be  pledged  hereafter,  or  may  have  been 
pledged  heretofore,  as  security  for  this  loon  or  any  other  obligation 
of  the  said  applicant  to  the  United  States,  for  loans  under  section 
210  of  the  transportation  act,  1920,  as  amended,  shall  be  applicable 
in  like  manner  to  secure  the  payment  of  any  and  all  such  loans. 

(e)  In  event  the  Commission  shall  certify  to  the  Secretary  of  the 
Treasury  that  the  applicant  has  failed  well  and  truly  to  comply 
with  any  one  or  more  of  the  terms  and  conditions  contained  in  the 
following  subsections  (1),  (2),  and  (3),  the  whole  or  any  part  of 
the  loan,  as  the  Commission  may  designate,  shall  become  due  and 
payable:  (1)  The  cost  to  the  applicant  of  any  loan  which  may  be 
secured  from  sources  other  than  the  United  States  for  use  in  con- 
nection with  this  loan  shall  not  exceed  7  per  cent  per  annum,  includ- 
ing in  such  cost  discount,  attorneys'  fees,  and  any  and  all  other  ex- 
penses in  connection  therewith.  (2)  No  part  of  said  loan  for  addi- 
tions and  betterments  shall  be  used  for  purposes  which,  under  the 
accounting  regulations  of  the  Commission,  might  or  would  be 
chargeable  to  accounts  other  than  those  prescribed  in  the  present 
classification  of  investment  in  road  and  equipment  of  steam  roads. 
(3)  The  applicant  shall  furnish  to  the  Commission  on  or  about 
January  1  and  July  1,  1921,  the  detoiled  certificates,  under  oath  of 
its  chief  engineer,  showing  the  character  and  cost  of  the  additions 
and  betterments  made  with  or  in  connection  with  the  funds  pro- 
vided by  this  loan  for  said  purposes.  The  loan  for  additions  and 
betterments  shall  have  been  expended  or  definitely  obligated  for 
the  purposes  for  which  loaned,  or  repaid  to  the  United  States,  on 
or  before  July  1, 1921. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  fumirfi,  in  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor,  and  reason- 
able protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  itself  with  the  funds  necessary  for  the  aforesaid  purpose 
from  other  sources. 

Done  in  Washington,  D.  C,  this  10th  day  of  September,  1920. 

06l.c.a 


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BQUIPHKNT  TRtJST  OF  PITTSBDBGfi  A  LAKB  BBIE  B.  B.        159 


Finance  Dockbt  No.  19. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  PITTS- 
BURGH &  LAKE  ERIE  RAILROAD  COMPANY  FOB  AU- 
THORITY TO  EXECUTE  AN  EQUIPMENT  TRUST. 


Submitted  July  SO,  19tO.    Decided  September  11,  . 


AnUiorltr  granted  appllcaot  to  exeaite  and  deliver  an  agreement  dated  July 
15, 1920,  with  Jobn  Carstensen,  Mlltoo  S.  Barger,  aod  Harry  G.  SnelUng,  as 
Teodors,  and  the  Guaranty  Trust  Company  of  New  York,  aa  trustee,  to  be 
called  PlttsburKb  ft  Lake  Erie  Railroad  equipment  tmet  of  1B20,  and  a 
certain  agreement  of  leaae  with  the  Gaaranty  Trust  Company  of  New  York, 
by  which  agreement  the  applicant  obligates  Itself  to  pay  {2,400.000  of  ID- 
year  equipment-trust  eold  certificates  and  attached  dividend  warrants  to  be 
Issued  thereunder  by  aforesaid  trustee. 

Rsed,  Smith,  8hau>  <6  Beat  for  applicant. 

Report  and  Order  of  the  Coicuibbion, 
Division  4,  Couhissionebs  Meter,  Daniels,  Eastman,  and  Potter. 
Bt  DiviaioN  4 : 

It  appearing.  That  the  Fittfiburgh  &■  Lake  Erie  Railroad  Company, 
a  common  carrier  hy  railroad  engaged  in  interstate  commerce,  haa 
applied  to  this  Commission  under  section  20a  of  the  interstate  com- 
merce act  for  an  order  authorizing  it  to  execute  and  deliver  a  cer- 
tain agreement  dated  July  16,  1920,  with  John  Carstensen,  Milton  S. 
Barger,  and  Harry  G.  SnelUng,  as  vendors,  and  the  Guaranty  Trust 
Company  of  New  York,  as  trustee,  and  a  certain  agreement  of  lease 
with  the  Guaranty  Trust  Company  of  New  York,  as  trustee,  to  be 
called  Pittsburgh  &  Lake  Erie  Railroad  equipment  trust  of  1920, 
by  and  under  the  terms  of  which  the  Pitt^urgh  &.  Lake  Erie  Rail- 
road Company  obligates  itself  to  pay  $2,400,000  of  15-year  equip- 
ment-trust certificates  and  attached  dividend  warrants  to  be  issued 
thereunder  by  the  trustee  aforesaid,  said  certificates  to  be  known  as 
the  Pittsburgh  &,  Lake  Erie  Railroad  equipment  trust  of  1920  7  per 
cent  equipment-trust  gold  certificates,  to  mature  serially,  the  first 
series  to  mature  July  15, 1921,  and  the  remaining  series  on  (he  15th 
day  of  July  of  each  year  thereafter,  respectively,  to  and  including 
July  15,  1935,  and  to  be  signed  and  issued  by  the  trustee  aforesaid, 

«6i.aa 


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160  INTEBSTA^TB  COMMEBCB   COUUIBSOIT  BEPOBTS. 

bearing  interest  at  the  rat«  of  7  per  cent  per  annum,  payable  semi- 
annually on  the  15th  day  of  January  and  July  in  each  year,  as  evi- 
denced by  said  attached  dividend  warrants,  all  as  set  forth  in  said 
agreement,  said  equipment-trust  certificates  to  be  applied  by  the 
trustee,  on  a  basis  of  97  per  cent  of  principal  amount  and  accrued 
interest,  in  the  procurement  of  the  equipment  set  forth  in  the  lease 
aforementioned,  as  follows ;  1,876  55-ton  all-steel  hopper  cars,  of  the 
total  estimated  cost  of  $3,508,300;  and. 

It  further  appearing^  Tliat  said  application  was  made  in  such 
form  and  contained  such  matters  as  the  Commission  prescribed 
and  that  it  was  made  under  oath,  signed,  and  filed  on  behalf  of 
said  carrier  by  one  of  its  executive  officers  having  knowledge  of 
matters  therein  set  forth  and  duly  designated  for  that  purpose  by 
the  carrier ;  and 

It  further  appearing.  That  notice  of  the  filing  of  said  application 
has  been  given  to  and  a  copy  thereof  filed  with  the  governor  of  each 
state  in  which  the  applicant  carrier  operates,  as  required  by  section 
20a,  and  that  no  objection  t«  the  issuance  by  this  Commission  of  an 
order  granting  the  application  has  been  offered  by  the  railroad  com- 
missions, public  service  or  utility  commissions,  or  other  appropriate 
state  authorities  of  such  states;  and 

/*  further  appearing,  That  the  petition  has  been  duly  heard  and 
submitted,  and  that  full  investigation  of  the  matters  and  things 
involved  in  this  proceeding  has  been  had: 

Held,  That  the  proposed  assumption  of  obligation  on  and  under 
the  equipment-trust  certificates  by  the  Pittsburgh  &  Lake  Erie  Sail- 
road  Company  {a)  is  for  a  lawful  object  within  its  corporate  pur- 
poses, and  compatible  with  the  public  interest,  which  is  necessary  and 
appropriate  for  and  consistent  with  the  proper  performance  by  it  of 
service  to  the  public  as  a  common  carrier,  and  which  will  not  impair 
its  ability  to  perform  that  service;  and  (6)  is  reasonably  necessary 
and  appropriate  for  such  purpose. 

It  t»  therefore  ordered.  That  the  Pittsburgh  &  Lake  Erie  Kailroad 
Company  be,  and  it  is  hereby,  authorized  to  execute  and  deliver  a 
certain  agreement  dated  July  15,  1920,  with  John  Carstensen,  Milton 
S.  Barger,  and  Harry  G.  Snelling,  as  vendors,  and  the  Guaranty 
Trust  Company  of  New  York,  as  trustee,  and  a  certain  agreement  of 
lease  with  the  Guaranty  TniSt  Company  of  New  York,  to  be  called 
Pittsburgh  &  Lake  Erie  Railroad  equipment  trust  of  1920,  by  and 
under  the  terms  of  which  the  Pittsburgh  A  Lake  Erie  Railroad  Com- 
pany obligates  itself  to  pay  $2,400,000,  principal  amount,  of  16-year 
equipment-trust  gold  certificates  and  attached  dividend  warrants  to 
be  issued  thereunder  by  the  trustee,  said  certificates  to  be  known  as 
Pittsburgh  &.  Lake  Erie  Railroad  equipment  trust  of  1920  7  per  cent 

eo  I.  c.  a 

V..-  ...',C<OO^C 


EQUIFKENT  TBU8T  OF  PITTBBUBGH  A  lAKE  DUE  B.  B.        161 

equipment-trust  gold  certificates,  to  matui«  serially,  the  first  aeriea 
to  mature  July  16, 1921,  and  the  remaining  series  on  the  15th  day  of 
July  of  each  year  thereafter,  respectively,  to  and  including  July  16, 
1936,  and  to  be  signed  and  issued  by  the  trust«e,  bearing  interest  at 
the  rate  of  7  per  cent  per  annum,  payable  semiannually  on  the  15th 
days  of  January  and  July  in  each  year,  as  evidenced  by  said  attached 
dividend  warrants,  all  as  set  forth  in  said  agreement,  and  that  the 
form  of  the  aforesaid  agreement  and  agreement  of  lease  filed  in  this 
case  are  hereby  approved. 

It  it  further  ordered.  That  upon  the  execution  and  the  delivery  of 
said  agreement  and  agreement  of  lease  herein  authorized  there  ^all 
be  filed  with  this  CfHnmission  verified  copies  of  the  same  in  the  form 
in  which  they  were  executed  and  delivered,  together  with  an  affidavit 
by  the  president  or  other  executive  officer  of  the  applicant  stating 
that  the  agreement  and  agreement  of  lease  as  executed  and  delivered 
are  the  same  as  herein  approved  by  the  Commission. 

/t  is  further  ordered,  That  said  equipment-trust  certificates  of  the 
principal  amount  of  $2,400,000  shall  be  sold  at  not  less  than  97  per 
cent  of  their  face  value  and  accrued  interest  to  give  net  proceeds  of 
$2,328,000. 

It  is  further  ordered,  That  said  equipment-trust  certificates  herein 
authorized  of  the  total  face  value  of  $2,400,000  (or  iJie  proceeds 
thereof)  shall  be  applied  by  said  trustee  solely  and  exclusively  toward 
payment  for  the  equipment  set  forth  in  the  lease  hereinbefore  ap- 
proved, as  follows:  1,375  55-ton  all-steel  hopper  cars,  of  the  total 
estimated  cost  of  $3,508,800. 

It  is  further  ordered,  That  if  said  certificates  of  the  principal 
amount  of  $2,400,000  shall  be  sold  at  such  price  as  to  realize  net  pro- 
ceeds of  more  than  $2,328,000,  no  portion  of  the  proceeds  of  such  sale 
in  excess  of  the  last  aforementioned  sum  shall  be  used  for  any  pur- 
pose without  the  further  order  of  the  Commission. 

It  is  further  ordered,  That  none  of  said  certificates  herein  author- 
ized shall  be  hypothecated  or  pledged  as  collateral  unless  any  such 
pledge  or  hypothecation  shall  have  been  expressly  approved  and 
authorized  by  this  Commission. 

/*  it  further  ordered,  That  the  Pittsburgh  &  Lake  Erie  Railroad 
Company  shall  for  each  six-montba'  period  ending  June  30  and 
December  31  file  not  later  than  30  days  from  the  end  of  such  period 
a  verified  report  showing  (a)  what  certificates  have  been  sold  or 
otherwise  disposed  of  during  such  period  in  accordance  with  the 
authority  contained  herein ;  {b)  the  date  of  such  sale  or  disposition ; 
(c)  to  whom  such  certificates  were  sold;  (d)  what  proceeds  were 
realized  from  such  sale;  («)  any  other  terms  and  conditions  of  such 
sale ;  and  (/)  the  amount  expended  in  reasonable  detail  of  the  pro- 
66844*^22— Vol  68 11 

•ooglc 


163  IHTEBSTATE  COMmeROE  COMMISSIOK  BEPORTS. 

ceeds  of  the  certificates  herein  authorized  for  the  purpose  specified 
herein  during  such  period,  and  stating  to  what  account  or  accounts 
such  expenditures  have  been  charged;  and  continue  to  file  such 
reports  until  all  of  said  certificates  shall  have  been  sold  or  disposed 
of  and  the  proceeds  expended  in  accordance  with  the  authority  con- 
tained herein,  and  if  during  any  period  no  certificates  were  sold  or 
disposed  of  or  proceeds  expended  the  report  shall  set  forth  such  fact 

It  is  further  ordered,  That  the  applicant  shall  within  30  days  of 
the  service  of  this  order  advise  this  Commission  whether  or  not  it 
accepts  the  same  with  all  its  terms  and  conditions. 

Avd  it  ia  further  ordered,  That  nothing  herein  shall  be  construed 
to  imply  any  guaranty  or  obligation  as  to  said  eqaipment-truat  cer- 
tificates, or  interest  thereon,  on  the  part  of  the  United  States. 

SUPPLEMENTAL  ORDER. 

(September  SO,  1920.) 

Upon  consideration  of  the  supplemental  application  of  the  Pitts- 
burgh &  Lake  Erie  Railroad  Company  filed  September  23,  1920,  in 
the  above-entitled  proceeding: 

It  ia  ordered.  That  the  order  of  this  Commission  made  in  this  pro- 
ceeding September  11,  1920,  be,  and  it  hereby  is,  amended  so  as  to 
provide  that  the  equipment-trust  certificates  to  be  issued  under  the 
agreement  establishing  the  Pittsburgh  &  Lake  Erie  Eailroad  equip- 
ment trust  of  1920  shall  bear  interest  at  the  rate  of  6^  per  cent  per 
annum  instead  of  7  per  cent,  and  that  they  may  be  sold  at  a  price 
which  will  net  the  applicant,  after  the  payment  of  expenses  and 
commissions,  not  less  than  an  average  of  95  per  cent  of  par  plus 
accrued  interest  thereon;  that  said  trust  agreement  and  said  certifi- 
cates shall  be  dated  October  1, 1920,  instead  of  July  15, 1920 ;  that  the 
interest  on  said  certificates  shall  be  payable  semiannually  on  April 
1  and  October  1,  instead  of  January  15  and  July  15;  that  said  cer- 
tificates shall  mature  serially  on  October  1  instead  of  July  15,  the  first 
series  to  mature  on  October  1,  1921 ;  and  that  the  forms  of  said 
certificates,  of  said  trust  agreement,  and  of  the  lease  of  equip- 
ment thereunder  shall  be  made  to  conform  to  the  changes  herein 
authorized. 

It  is  further  ordered.  That,  except  as  herein  amended,  the  said 
order  shall  remain  unchanged. 


Digiized  by  Google 


LOAN  TO  SBABOABO  AIE  LINE  BT. 


Finance  Docket  No.  1017. 
IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  SEA- 
BOARD AIR  LINE  RAILWAY  COMPANY  FOR  A  LOAN 
FROM  THE  UNITED  STATES  TO  AID  IN  MEETING 
MATURING  INDEBTEDNESS  AND  IN  PROVIDING 
EQUIPMENT  AND  OTHER  ADDITIONS  AND  BETTER- 
MENTS. 

Sutmttted  JMv  It,  ISiO.    Deaided  September  II,  1920. 

AppllcaUon  granted  in  part  and  loan  of  $6,073,400  approved. 

8.  Daviat  Warfisld  and  Forney  Johnston  (or  applicant. 
Report  of  the  Cohm ission. 
DinsioN  4,  Commissioners  Daniels,  Eastman,  akd  Potter. 
Bt  Division  4 ; 

The  Seaboard  Air  Line  Railway  Company,  a  carrier  bj  railroad 
subject  to  the  interstate  comnierce  act,  hereinafter  referred  to  as  the 
applicant,  on  May  22, 1920,  made  application  to  the  Interstate  Com- 
merce Commission  for  a  loan  from  the  United  States,  in  accordance 
vith  the  prorisions  of  section  210  of  the  transportation  act,  1920, 
and  on  June  19,  July  6,  and  July  12, 1920,  amended  and  supplemented 
its  said  application,  pursuant  to  the  Commission's  announcement  of 
June  7, 1920,  of  the  general  principles  by  which  it  would  be  governed 
in  administering  the  fund  created  by  said  section  of  the  act 

In  the  application,  as  amended  and  supplemented,  the  applicant 
sets  forth : 

1.  That  the  amount  of  the  loan  desired  is  $11,337,400. 

2.  That  the  term  for  which  the  loan  is  desired  is  15  years. 

3.  That  the  purposes  and  uses  of  the  loan  are  to  assist  the  appli- 
cant  in  the  acquisition  of  new  equipment  and  in  completing  the 
financing  of  equipment  heretofore  acquired,  in  providing  itself  with 
additions  and  betterments  to  roadway  and  equipment,  and  in  meet- 
ing maturing  obligations. 

4.  The  present  and  prospective  ability  of  the  applicant  to  repay 
the  loan  and  to  meet  its  obligations  in  regard  thereto. 

5.  The  character  of  the  security  offered  in  connection  with  the 
loan  sought  is  the  applicant's  first  and  consolidated  series-A  6  per 
cent  bonds  of  1945. 

BBLCa 


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164 


INTERSTATE  COUMERCE  COUMISSION  BSPOBXS. 


6.  The  extent  to  which  the  public  convenience  and  necessity  will 
be  served. 

Said  application  was  accompanied  by  such  facts  and  details  as  the 
Commission  required  with  respect  to  the  physical  situation,  owner- 
ship, capitalization,  indebtedness,  contract  obligations,  operation, 
and  earning  power  of  the  applicant,  together  with  such  other  facts 
relating  to  the  propriety  and  expediency  of  granting  the  loan  ap- 
plied for  and  the  ability  of  the  applicant  to  make  good  the  obligation 
as  the  Commission  deemed  pertinent  to  the  inquiry. 

The  applicant,  by  its  comptroller,  L.  R.  Powell,  jr.,  made  oral 
request  on  September  8,  1920,  that  the  amount  of  loan  requested 
for  refrigerator  equipment,  $241,400,  be  reduced  to  $199,400. 

After  investigation,  the  Commission  finds  that  the  making  in 
part  of  the  proposed  loan  in  the  amount  of  $6,073,400,  to  be  used 
in  the  manner  hereinafter  set  forth,  is  necessary  to  enable  the  ap- 
plicant properly  to  meet  the  transportation  needs  of  the  public. 


Cort. 

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tl,OH,0(U 

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10,05»,0<» 

l,i»a.Boo 

8,1173,«( 

The  Commission  further  finds  that  the  prospective  earning  power 
of  the  applicant  and  the  character  and  value  of  the  security  offered 
afford  reasonable  assuranoe  of  the  applicant's  ability  to  repay  the 
loan  within  the  time  fixed  therefor  and  to  meet  its  other  obligations 
in  connection  with  such  loan,  and  afford  reasonable  protection  to  the 
United  States,  and  that  the  applicant  is  unable  to  provide  itself  from 
other  sources'with  the  funds  necessary  for  the  aforesaid  purposes. 

A  certificate  will  be  issued  accordingly. 


Certificate  No.  il  for  a  Loan  under  Section  tlO  of  the  Tranaporta- 
tion  Actf  J9S0f  as  Amended. 


The  Interstate  Commerce  Commission  certifies  to  Uie  Secretary  of 
the  Treasury  its  findings: 

1.  That  the  making  of  a  loan  of  $6^73,400  by  the  United  States 
to  the  Seaboard  Air  Line  Railway  Company,  hereinafter  called  the 
applicant,  for  the  purpose  of  providing  said  applicant  with  refrig- 
erator cars  and  additions  and  betterments  and  to  assist  it  in  meeting 
its  maturing  obligations  is  necessary  to  enable  the  applicant  prop- 
erly to  meet  the  transportation  needs  of  the  public. 

«s  I.  c.  C. 


LOAN  TO  SEABOARD  AIR  LIVE  BT.  165 

3.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  furnish  rea- 
sonable assurance  of  the  applicant's  ability  to  repay  the  loan  within 
the  time  fixed  therefor  and  to  meet  its  ot^er  obli^tions  in  connec- 
tion therewith. 

3.  That  the  amount  of  the  loan  which  is  to  be  made  is  $6,073,400. 

4.  That  the  time  from  the  making  thereof  within  which  the  loan 
is  to  be  repaid  in  full  is  15  years. 

5.  That  the  terms  and  conditions  of  the  loan,  including  the  secur- 
ity to  be  given  for  repayment,  shall  be  as  follows: 

(a)  The  loan  shall  be  made  within  90  days  from  the  date  of  this 
certificate,  in  five  installments  of  $1,214,680  each.  The  several  in- 
stallments of  loan  shall  be  repaid  in  from  11  to  15  years  from  the 
dates  thereof,  as  follows: 

Inrtollment  No.  1 »1, 214, 680        1931 

InataUment  No.  2_ 1,214,680        1932 

iDstallmeHt  No.  3 1,214,680        1988 

Installment  No.  4 1,214,680        1984 

InstaUment  No.  5 1.214.680       1935 

Upon  making  the  first  installment  of  the  loan,  $1,214,680,  there 
shall  be  pledged  as  collateral  security  for  the  entire  loan  $199,400, 
par  value,  paid-up  stock  of  the  Fruit  Growers'  Express  Company; 
$2,335,000,  par  value^  of  the  Seaboard  Air  Line  Kailway  Company 
6  per  cent  preferred  stock;  $1,500,000,  par  value,  of  the  Seaboard  Air 
Line  Railway  Company  common  stock;  and  $83,000,  par  value,  of 
the  Seaboard  Air  Line  Railway  Company  first  and  consolidated 
series-A  6  per  cent  bonds  maturing  1945.  ITpon  making  the  second, 
third,  and  fourth  installments  of  the  loan,  each  installment  being  for 
$1,214,680,  there  shall  be  pledged  in  each  case  as  collateral  security 
for  the  entire  loan  $1,823,000,  par  value,  of  the  Seaboard  Air  Line 
Railway  Company  first  and  consolidated  series-A  6  per  cent  bonds 
maturing  1945.  Upon  making  the  fifth  and  last  installment  of  the 
loan,  $1,214,680,  there  shall  be  pledged  as  collateral  security  for  the 
entire  loan  $1,819,000,  par  value,  of  the  Seaboard  Air  Line  Railway 
Company  first  and  consolidated  series-A  6  per  cent  bonds  maturing 
1945.  After  all  installments  of  the  loan  shall  have  been  made,  the 
security  for  the  entire  loan  will  be  as  follows ; 
Firat  iDstallment :  P"  '"im 

Fruit  Growers'  Bxpreaa  Companj  paid-up  stock (199,400 

Seaboard  Air  Line  Railway  Company  6  per  cent  preferred  stock.  2, 235, 000 

Seaboard  Air  Line  Railway  Company  common  stock 1, 500, 000 

Seaboard  Atr  Line  Railway  Company  first  and  consolidated  serips- 

A  6  per  cent  bonds,  maturing  1846 483,000 

S«c«nd  InBtallment: 

Seaboard  Air  Line  Railway  Companj  flnt  and  coniolldated  serles- 

A  6  per  cent  bond^  maturins  1945 1,823,000 

6CI.C.C  ^1 

rKtzedbyCjOOgle 


166  INTEBSTATB  GOUICEBOB  OOUUISBIOK  BBPORTS. 

Tbird  inBtallment :  Far  Talo*^ 

Seaboard  Air  Line  Railway  Company  first  and  consolidated 

serle»-A  8  per  cent  bonds,  matnring  19«i '1-  823,000 

Foarth  installment: 

Seaboard  Air  Line  Railway  Company  ilrtt  and  cansolidated 

eeries-A  6  per  cent  bonds,  maturing  1945 It  823, 000 

Firtb  installment: 

Seaboard   Air  Line  Railway  Company  flrst  and  consolidated 

seriee-A  «  per  cent  bonds,  maturing  1945 1,819,000 

Recapitnlation : 

Pruit  Growers'  Express  Company  stock ^SB,  400 

Seaboard  Air  Line  Railway  Company  «  per  cent  preferred  stock.    2. 236. 000 

Seaboard  Air  Une  Railway  Company  common  stock 1,600,000 

Seaboard  Air  Line  Railway  Company  flrst  and  consolidated 

serles-A  6  per  cent  bonds,  maturing  1945 T,  771, 000 

(6)  The  applicant  shall,  on  demand  of  the  Secretary  of  the  Treas- 
ury, with  the  concurrence  of  the  Commission,  deposit  such  addi- 
tional security  as  may  be  from  time  to  time  required;  the  Becuritieo 
pledged,  together  with  any  that  may  be  pledged  hereafter,  or  may 
have  been  pledged  heretofore,  as  security  for  this  loan  or  any  other 
obligation  of  the  said  applicant  to  the  United  States,  for  loans 
made  under  section  210  of  the  transportation  act,  1920,  ns  amended, 
shall  be  applicable  in  like  manner  to  secure  the  payment  of  any  and 
all  such  loans. 

(c)  The  collateral  security  shall  be  released  proportionately  as  in- 
stallments of  the  loan  are  paid. 

{d}  Applicant  shall  have  the  privilege  of  paying  any  part  or  all 
of  the  loan  before  maturity. 

(«)  In  the  event  the  Commission  shall  certify  to  the  Secretary  of 
the  Treasury  that  the  applicant  has  failed  well  and  truly  to  comply 
with  any  one  or  more  of  the  terms  and  conditions  contained  in  the 
following  subsections  (1),  (2),  and  (8),  the  whole  or  any  part  of  the 
loan,  as  the  Commission  may  designate,  shall  become  due  and  pay- 
able. (1)  The  cost  to  the  applicant  of  any  loan  which  may  be 
secured  from  sources  other  than  the  United  States,  for  use  in  con- 
nection with  this  loan,  shall  not  exceed  7  per  cent  per  annnm,  in- 
cluding in  such  cost  discounts,  attorneys'  fees,  and  any  and  all  othet- 
expenses,  except  that  to  effectively  accomplish  Uie  further  extension 
of  $1,000,000,  par  value,  of  applicant's  maturing  two-year  extended 
6  per  cent  notes,  aggregating  $4,000,000,  the  applicant  may  incur 
an  additional  expense  of  one-half  of  1  per  cent  of  said  $1,000,000  of 
notes ;  said  additional  expense  not  to  exceed  a  total  amount  of  $5,000, 
to  which  may  be  added  such  reasonable  sum,  not  to  exceed  a  total 
amount  of  $10,000,  as  may  be  necessary  for  printing,  advertising, 
distribution  of  circulars,  and  necessary  and  reasonable  trnstAes'  fees 
in  the  matter  of  an  extansion  trust  agreement  and  the  issue  of  exten- 
sion notes.    (2)  The  expenditures  made  from  the  loan  for  additions 

esLca 


LOAN  TO  8EAB0AED  AIB  LtHB  RY.  167 

and  bettermenta  shall  be  coDfined  to  such  expenditures  as  may  be 
chargeable  to  accounts  for  investment  in  road  and  equipment  pro- 
vided in  the  Commission's  accounting  classitications  for  steam 
roads  in  effect  at  the  time  the  expenditures  may  be  made.  (3)  The 
applicant  shall  furnish  the  Commission  on  January  1  and  July  I, 
1921,  detailed  certificates,  under  oath  of  its  chief  engineer,  of  addi- 
tions and  betterments  made  with  or  in  connection  with  the  loan,  for 
substantially  the  following  purposes  and  amounts: 

Ballast,  decking,  tmd  strengthenliiK  and  Hlllug  trestlee.. (68,790 

Ballasting    roadbt^ 75,  000 

RhII    renewals __ 228,  000 

Dredging : _     27,000 

Shop  niaclilnery  and  fudWtles __    53,375 

Onder  pit  and  fuel  faculties 10,000 

PaBslng  and  y.ard  tracks 27, 000 

MInw  bettermeDts  to  existing  equipment 60,000 

Additional    work   equipment 4o.  000 

Station    facilities 23.900 

Indnstrtal  tracks 82.101 

Miscellaneous  Items 49,874 

Total 750,000 

The  loan  for  additions  and  betterments  shall  have  been  expended 
or  definitely  obligated  for  the  purposes  for  which  loaned  or  repaid  to 
the  United  States  on  or  before  July  1, 1921. 

(/)  In  the  event  of  the  actual  or  threatened  insolvency  of  the 
applicant,  or  in  the  event  of  the  actual  or  threatened  failure  of  the 
applicant  or  its  successors  to  meet  the  interest  or  principal  when 
due  on  any  of  the  notes  or  other  forms  of  obligation  by  which  the 
loan  is  to  be  evidenced,  or  in  the  event  of  the  failure  of  the  applicant 
to  meet  any  of  its  other  obligations  in  connection  with  the  loan, 
or  in  the  event  of  actual  or  threatened  receivership  of  the  applicant, 
the  Secretary  of  the  Treasury,  with  the  concurrence  of  the  Inter- 
state Commerce  Commission,  may  declare  all  of  the  obligations  and 
accrued  interest  thereon  in  respect  of  the  loan  to  be  due  and  payable, 
and  the  principal  and  interest  of  the  said  obligations  shall  thereupon 
be  immediately  due  and  payable  to  the  United  States. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  required,  furnish,  in 
the  opinion  of  the  Commission,  reasonable  assurance  of  the  appli- 
cant's ability  to  repay  the  loan  within  the  time  fixed  therefor,  and 
reasonable  protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  itself  from  other  sources,  with  the  funds  necessary  for 
the  aforesaid  purposes. 

Done  in  Washington,  D.  C,  this  11th  day  of  September,  1920. 
eci.cc. 


CK:,iz...,CodgIc 


168  INTEBSTATE   OOMUBRGB  COMMISSION  BBPORTB. 

Amended  Certificaie  jVo,  SI  for  a  Loan  under  Section  HO  of  tht 
Transporta^on  Act,  19iS0,  as  Amended. 

The  Interstate  Commerce  Commiasion  herel^  amends  its  certifi- 
cate No.  21  for  loan  under  section  210  of  the  transportation  act, 
1920,  as  amended,  and  certifies  to  the  Secretary  of  the  Treasury  ita 
findings: 

1.  That  the  making  of  a  loan  of  $6,073,400  by  the  United  States 
to  the  Seaboard  Air  Line  Railway  Company,  hereinafter  called  the 
applicant,  for  the  purpose  of  providing  said  applicant  vrith  re- 
frigerator cars  and  additions  and  betterments  and  to  assist  it  in 
meeting  its  maturing  obligations  is  necessary  to  enable  the  appli- 
cant properly  to  meet  the  transportation  needs  of  the  public 

2.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  furnish 
reasonable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor  and  to  meet  its  other  obligations  in 
connection  therewith. 

8.  That  the  amount  of  the  loan  which  is  to  be  made  is  $6,073,400. 

4.  That  the  time  from  the  making  thereof  within  which  the  loan 
is  to  be  repaid  in  full  is  15  years. 

a.  That  the  terms  and  conditions  of  the  loan,  including  the  security 
to  be  given  for  repayment,  shall  be  as  follows : 

(a)  The  loan  shall  be  made  within  90  days  from  the  date  of  this 
certificate,  in  five  installments  of  $1,214,680  each.  The  several  in- 
stallments of  loan  shall  be  repaid  in  from  11  to  15  years  from  the 
dates  thereof  as  follows : 

iDstnllment  No.  1 fl,214,e80        19S1 

Installment  No.  2 1.214,680        1932  ' 

Installment  No,  3 ^ 1,214.680        1983 

iDBtallraent  No.  4 _ 1,214,680        1984 

InstaUment  No.  5 1,214.680        1935 

Upon  making  the  first  installment  of  the  loan,  $1,214,680,  there  shall 
be  pledged  as  collateral  security  for  the  entire  loan  $199,400,  par 
value,  of  the  stock  of  the  Fruit  Growers'  Express  Company,  repre- 
sented by  certificates  which  shall  express  the  stock  represented 
Uiereby  to  the  paid-up  $2,23.1,000  par  value,  of  the  Seaboard  Air 
Line  Railway  Company  6  per  cent  preferred  stock ;  $1,500^)00,  par 
value,  of  the  Seaboard  Air  Line  Railway  Company  common  stock ; 
and  $483,000,  par  value,  of  the  Seaboard  Air  Line  Railway  Company 
first  and  consolidated  series-A  6  per  cent  bonds  maturing  1945. 
Upon  making  the  second,  third,  and  fourth  installments  of  the  loan, 
each  installment  being  for  $1,214,680,  there  shall  be  pledged  in  each 
case  as  additional  collateral  security  for  the  entire  loan  $1,823,000, 
par  value,  of  the  Seaboard  Air  Lkie  Railway  Company  first  and 
consolidated  series-A  6  per  cent  bonds  maturing  1946.  Upon  mak- 
.  oai.C.C. 


UOAS  TO  SBABOABD  AIS  UNE  BT.  169 

ing  the  fifth  and  last  instaUment  of  the  loan,  $1,214,680,  there  shall 
be  pledged  as  additional  collateral  security  for  the  entire  loan 
$1,819,000,  par  value,  of  the  Seaboard  Air  line  Railway  Company 
first  and  consolidated  series-A  6  per  cent  bonds  maturing  1945. 
After  all  installments  of  the  loan  shall  have  been  made,  the  security 
for  the  entire  loan  will  be  as  follows : 
First  InstaUment :  P»r  "i™. 

Fruit  Growers'  Express  Company  pald-np  stock $199, 400 

Seaboard  Atr  Line  Railway  Company  B  per  cent  preferred  stocic,  2, 235, 000 

Seaboard  Air  Line  Railway  Company  common  stock 1,500,000 

Seaboard   Air  Line  Railway  Company   first  and   consolidated 

serles-A  6  per  ceot  bonds,  matnrlne  194& 483,000 

Second  tnstallment : 

Seaboard   Air  Line  Railway   Company  first   and   consolidated 

serles-A  6  per  cent  twHids,  maturing  1946 1, 8S3, 000 

Third  Installment: 

Seaboard   Air   Line  Railway  Company   first  and  consolidated 

serles-A  6  per  cent  bonds,  maturing  1946 1.823.000 

Fourtb  Installment: 

Seaboard   Air  Line  Railway   Company   first   and  consolidated 

serles-A  6  per  cent  bonds,  maturing  1945 1.823,000 

Fifth  InstallmeDt : 

Seaboard  Air  Line   Railway   Company  first   and   consolidated 

series-A  6  per  cent  bonds,  maturing  1945 1,819.000 

BecapitolatloD : 

Pniit  OrowNv'  Express  Company  stock 199,400 

Seaboard  Air  Line  Railway  Company  S  per  cent  preferred  stock.  2, 235, 000 

Seaboard  Air  Line  Railway  Company  common  stock 1, 600, 000 

Seaboard   Air   Line  Railway  Company  first   and   consolidated 

series-A  9  per  cent  bonds,  maturing  1645 7.771,000 

(&)  The  applicant  shall,  on  demand  of  the  Secretary  of  the 
.  Treasury,  with  the  concurrence  of  the  Commission,  deposit  such 
additional  security  as  may  be  from  time  to  time  required;  the  securi- 
ties pledged,  together  with  any  that  may  be  pledged  hereafter,  or 
may  have  been  pledged  heretofore,  as  security  for  this  loan  or  any 
other  obligation  of  the  said  applicant  to  the  United  States,  for  loans 
made  under  section  210  of  the  transportation  act,  1020,  as  amended, 
shall  be  applicable  in  like  manner  to  secure  the  payment  of  any  and 
all  such  loans. 

(c)  The  collateral  security  shall  be  released  proportionately  as  in- 
stallments of  the  loan  are  paid. 

(d)  Applicant  shall  have  the  privilege  of  paying  any  part  or  all 
of  the  loan  before  maturity. 

(e)  In  the  event  the  Commission  shall  certify  to  the  Secretary 
of  the  Treasury  that  the  applicant  has  failed  well  and  truly  to  com- 
ply with  any  one  or  more  of  the  terms  and  conditions  contained  in 
the  following  subdivisions  (1),  (2),  and  (3),  the  whole  or  any  part 

«[I.G.O. 


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170  IITTEBSTATB  OOUMEBOB  OOHMISSIOH  BSFOBTS. 

of  the  loan,  as  the  Commission  m&y  desigs&te,  shall,  at  the  option  of 
the  holder,  become  due  and  payable.  (1)  The  cost  to  the  applicant 
of  any  loan  which  may  be  secured  from  sources  other  than  the  United 
States,  for  use  in  connection  with  this  loan,  shall  not  exceed  7  per  cent 
per  annum,  including  in  such  cost  discounts,  attorneys'  fees,  and  any 
and  all  other  espenses,  except  that  to  effectively  accomplish  the  fur- 
ther extension  of  $1,000,000,  par  value,  of  applicant's  maturing  two- 
year  extended  6  per  cent  notes,  aggregating  $4,000,000,  the  applicant 
may  incur  an  additional  expense  of  one-half  of  1  per  cent  of  said 
$1,000,000  of  notes,  said  additional  expense  not  to  exceed  a  total 
amount  of  $5,000,  to  which  may  be  added  such  reasonable  sum,  not 
to  exceed  a  total  amount  of  $10,000,  as  may  be  necessary  for  printing 
and  advertising,  distribution  of  circulars,  and  necessary  and  reason- 
able trustees'  fees  in  the  matter  of  an  extension  trust  agreement  and 
the  issuance  of  extension  notes.  (2)  The  expenditures  made  from 
the  loan  for  additions  and  betterments  shall  be  confined  to  such  ex- 
penditures as  may  be  chargeable  to  accounts  for  investment  in  road 
and  equipment  provided  in  the  Commission's  accounting  classifica- 
tions for  steam  roads  in  effect  at  the  time  the  expenditures  may  be 
made.  (3)  The  applicant  shall  furnish  the  Conunission  on  January 
1  and  July  1,  1921,  detailed  certificates,  under  oath  of  its  chief  engi- 
neer, of  additions  and  betterments  made  with  or  in  connectLon  with 
the  loan  for  substantially  the  following  purposes  and  amounts : 

Ballast,  decking,  and  strengtbenlog  and  fllling  trestles $58,750 

Ballasting   roadbed _ _ 76,000 

Rail  renewals— _— 223,000 

Dredging _ 27.000 

Shop  machinery  and  facilities _.    53,375 

Cinder  pit  and  fuel  facilities 10,000 

Passing  and  yard  traeka 27,000 

Minor  bettemaentB  to  existing  equipment _._    00.000 

Additional  work  equipment 1 40,000 

Station    facilities 23,900 

Industrial    tracks „    92,101 

UlBCeltaneoDs  items 46,874 

Total 750.000 

The  loan  for  additions  and  betterments  shall  have  been  expended  or 
definitely  obligated  for  the  purposes  for  which  loaned,  or  repaid  to 
the  United  States,  on  or  before  July  1,  1921.  In  the  event  of  the 
failure  of  the  applicant  to  meet  the  interest  of  principal  when  due 
of  any  of  the  notes  or  other  forms  of  obligation  by  which  the  loan  is 
to  be  evidenced,  or  in  the  event  of  the  insolvency  of  the  applicant, 
or  in  the  event  of  the  appointment  of  a  receiver  of  the  applicant, 
or  of  its  property,  the  whole  or  any  part  of  the  obligation  or  obliga- 
tions of  the  applicant  given  pursuant  to  this  certificate,  with  accrued 

eoi.o.a 


LOAN  TO  SBIBOABO  AIR  UNB  BY.  171 

interest  thereon,  shall  mature  at  the  election  of  the  holder  thereof 
upon  presentation  thereof  for  payment. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  required,  furnish,  in 
the  opinion  of  the  Commission,  reasonable  assurance  of  the  appli- 
ouit's  ability  to  repay  the  loan  within  the  time  fixed  therefor,  and 
reaeonablfl  protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  itself  from  other  sources  with  the  funds  necessary  for 
the  cforesaid  purposes. 

Done  in  Washington,  D.  C,  this  ISth  day  of  September,  1920. 
asLao. 


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INTEBSrATB  COHHBBGE   CX)MH1SSI0N   BBF0BT9. 


Finance  Docket  No.  39. 
IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  NEW 
YORK  CENTRAL -RAILROAD  COMPANY  FOR  AUTHOR- 
ITY TO  ISSUE  COLLATERAL-TRUST  BONDS  AND  RE- 
FUNDING AND  IMPROVEMENT  MORTGAGE  BONDS. 

Submitted  September  10, 19£0.    Decided  September  IS,  19tO. 

Authority  granted  (1)  to  Issue  $Z5,000,000  of  lO-jear  7  per  cent  collatenl-trost 
bonds,  to  be  dated  September  1,  1920,  If  coupon  bonds,  and  on  tiie  date 
of  Issue,  If  registered  bonds,  without  coupons,  to  mature  September  1,  1930, 
and  to  bear  Interest  at  the  rate  of  7  per  cent,  in  accordance  with  a  certain 
trust  agreement,  and  (2)  to  Issue  $25,000,000  of  refunding  and  improve- 
ment mortgage  bonds,  series  B,  coupon  and  registered,  to  be  dated  April  1, 
1920,  to  mature  October  1,  2013,  and  to  l>ear  interest  at  the  rate  of  6  per 
cent,  in  accordance  with  a  certain  mortgage  and  suppiementai  mortgage, 
to  be  pledged  as  part  of  the  security  for  above  10-year  7  per  cent  collaterai- 
trust  bonds ;  provided,  as  conditions  precedent,  that  $20,000,000  of  the  aiq>li- 
cant's  refunding  and  Improvement  mortgage  bonds,  series  A,  now  pledged 
as  collateral  security  for  the  applicant's  one-year  collateral-trust  notes 
due  September  16,  1920,  be  released  from  pledge  and  canceled  prior  to  or 
at  the  time  of  the  Issue  of  said  serles-B  bonds. 
Robert  J.  Cory  for  applicant. 

Lansing  P.  Reed  for  J.  P.  Morgan  &  Company,  and  Alfred  P. 
Thorn  for  Association  of  Railway  Executives. 

Repokt  of  the  Commission. 
Division  4,  Commibsionehs  Daniels,  Eastman,  and  Potter. 
By  Division  4 : 

The  New  York  Central  Railroad  Company,  a  common  carrier  by 
railroad  engaged  in  interstate  commerce,  seeks  authority  to  issue 
$25,000,000  of  its  10-year  collateral-trust  gold  bonds  bearing  interest 
at  the  rate  of  7  per  cent  per  annum  and  due  September  1,  1930,  and 
to  issue  also  $25,000,000  of  its  series-B  refunding  and  improvement 
mortgage  bonds  bearing  interest  at  the  rate  of  6  per  cent  and  due 
October  1,  2013,  The  10-year  collateral-trust  bonds  are  to  be  sold 
to  the  public.  The  mortgage  bonds  are  to  be  pledged  as  security 
for  the  payment  of  the  collateral-trust  bonds  and  authority  is  sought 
to  issue  them  for  this  purpose  only.  The  applicant  was  unwilling;, 
in  view  of  the  prevailing  high  interest  rates,  to  offer  to  the  public 
-  an  issue  of  long-term  mortgage  bonds,  but  prefers  instead  to  issue 
bonds  which  may  be  retired  at  the  end  of  10  years,  using  the  mort- 
gage bonds  as  collateral.  As  additional  security,  the  applicant  pro- 
poses to  pledge  $3,750,000  par  value  of  the  first-preferred  stock  and 

65 1.  C.  c. 


BONDS  CV  ITBW  TORK  CBNTBAL  R.  R.  173 

15,600,000  par  Taln«  of  the  secoad-preferred  stock  of  the  Re&dinf; 
Company,  dott  held  in  its.  treasury,  so  that  the  market  value  of  all 
the  eollat^al  may  approximate  126  per  cent  of  the  face  value  of  the 
coUateral-tniBt  bonds. 

The  proceeds  of  the  collateral-trust  bonds  are  to  be  used  in  part  to 
pay  $15,000^00  of  applicant's  one-year  6  per  cent  collateral-trust 
gold  notes  maturing  on  September  15,  1920,  which  are  secured  by 
$80,000^000  of  series-A  4t^  per  cent  refunding  and  improvement  mort- 
gage bonds.  Tbeae  notes  were  issued  to  pay  two-year  notes,  simi- 
lariy  secured,  which  matored  on  September  15, 1919,  the  latter  having 
been  issued  in  1917,  with  Uie  approval  of  various  state  railway  com- 
missions, to  reimburse  the  applicant's  treasury  for  expenditures  upon 
additions  and  improvementa  to  property  owned  or  leased  by  the  ap- 
[rficant.  Whoi  the  one-year  notes  are  paid,  the  series-A  mortgage 
bonds  are  to  be  canceled.  The  remaining  proceeds  of  the  collateral- 
trust  bonds  are  to  be  used  to  reimburse  the  treasury  for  the  pay- 
ment of  $130,000  of  Norwood  A  Montreal  mortgage  bonds  which 
matored  on  April  1,  1916,  for  the  payment  of  $875,000  of  Rome, 
Watortown  A  Ogdausburg  mortgage  bonds  which  matured  on  May 
1,  1918,  and  f(H-  expenditures  upon  additions  and  improvements 
aggregating  more  than  $7,000,000;  and  to  provide  fnnds  for  further 
additions  u>d  improvements  which  are  still  to  be  made.  Capital  ex- 
penditures provided  for  by  the  notes  issued  in  1917,  as  well  as  those 
which  are  to  be  provided  for  by  the  new  bonds,  are  listed  in  doteil 
in  verified  schedules  submitted  with  the  application. 

It  is  the  intention  of  the  applicant  when  its  treasury  has  thus  been 
reimbuised  to  arrange  for  the  payment  of  a  note  for  $6,000,000  which 
matures  on  November  17,  1920,  and  a  further  note  for  $3,000,000 
whid)  matures  on  January  2, 1931. 

Gtpies  of  the  application  were  sent,  as  required  by  section  20a  of 
the  interstate  commerce  act,  to  the  governors  of  all  states  in  which 
applicant  operates.  No  objection  to  the  granting  of  the  authority 
desired  was  offered  on  behalf  of  any  of  these  states  except  the  state 
of  Michigan.  Because  of  an  understanding  reached  between  the 
lathorities  of  that  stete  and  the  applicant,  this  objection  was  not 
pressed  before  us. 

It  developed  at  the  hearing  tliat  the  proposed  collateral-trust 
bcHids  had  been  sold  m  August  20, 1920,  subject  to  our  authorisation. 
While  the  law  does  not  prohibit  such  a  conditional  sale  in  advance 
of  approval  of  an  issue  of  securities,  carriers  should  realize  that  we 
shall  not  be  controlled  in  our  action  by  representetions  that  failure 
to  accord  approval  of  issues  conditionally  sold  will  result  in  dis- 
turbance or  disarrangement  of  plans  based  upon  anticipated 
approval. 
WI.C.O. 

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174  INTERSTATE   COMMEBCE  COMMISSION  BKPOBTS. 

The  facte  in  regard  to  the  sale  are  briefly  tiiese.  It  waa  made 
without  competition.  Applicant  dealt  only  witli  J.  P.  Morgan  A 
Company  and  accepted  that  firm's  agreement  to  "endeavor  to  form 
a  syndicate  to  purchase  from  ourselves  and  associates  at  97  per  cent 
and  accrued  interest  and  offer  for  public  subscription  at  par  mod 
accrued  interest."  If  this  endeavor  proved  successful,  J.  P.  Morgan 
&  Company  agreed  to  buy  the  bonds  at  96.5259  per  cent  of  par  &nd 
accrued  interest,  or,  in  other  words,  upon  a  7.5  per  cent  basis.  The 
"  associates "  mentioned  in  the  agreement  were  eventually  the  Na- 
tional City  Company  and  the  First  Kational  Bank  of  Xew  York. 
The  evidence  shows  that  on  August  18,  1920,  J.  P.  Morgan  &  Com- 
pany, by  wire  and  letter,  invited  various  dealers  in  investment 
securities  throughout  the  country  to  become  members  of  the  syndi- 
cate, notifying  them  of  the  amounts  of  their  participation,  to  whit^ 
they  were  to  signify  their  assent  by  10  o'clock  on  the  morning  of 
August  20,  when  the  subscription  books  were  to  be  formally  opened. 
Out  of  428  dealers  to  whom  the  invitation  was  sent,  including  J.  P. 
Morgan  &  Company,  403  accepted.  The  subscription  books  were 
closed  within  two  hours  of  their  opening,  and  there  were  &,478  sab- 
Bcriptions,  at  par  and  accrued  interest,  totaling  $89,393,600,  an  over- 
subscription of  more  than  50  per  cent.  The  evidence  shows  that  the 
contract  of  conditional  sale  between  J.  P.  Morgan  &  Cconpany  and 
the  applicant  was  not  consummated  until  after  the  formation  of  the 
syndicate  on  August  20. 

The  entire  cost  to  the  applicant  of  marketing  the  issue  was  the 
difference  between  the  par  value  of  the  bonds  and  the  sale  price  to 
J.  P.  Morgan  &  Company,  this  difference  being  $Sfi8,52fi,  plus  small 
amounts  for  taxes,  legal  services,  and  the  engraving  of  the  certificates. 
J.  P.  Morgan  &.  Company  received  as  syndicate  manager  $118,525, 
which  was  divided  with  its  associates,  and  out  of  which  it  paid  cer- 
tain clerical  expenses,  but  none  of  the  other  expenses  of  the  syndicate. 
The  syndicate  members  who  placed  the  bonds  with  investors  received 
from  the  syndicate  for  such  services  a  commission  of  1.5  per  cent  on 
all  sales  within  the  amounts  allotted  to  them  and  a  commission  of 
2  per  cent  upon  sales  in  excess  of  the  allotments.  After  deducting 
these  commissions  and  tlio  expenses  of  the  syndicate,  the  portion  of 
the  $750,000  remaining  was  distributed  to  members  of  the  syndicate 
in  proportion  to  their  allotments.  This  profit  amounted  to  abont 
1.1  per  cent  Out  of  the  403  syndicate  members,  26  sold  no  bonds. 
The  distribution  of  the  $750,000  is  shown  in  the  following  table : 

Grmw  proBt  ot  S  per  cent 1760,000 

StraiKbt  selling  commission.  US  per  cent  <S37fi.O0(».  on  S20.00D.OOO._ 

Extra  aeUinB  commlwlou,  0^  per  cent  (»60,1S0),  on  $10,026,000- ^^.iw 

OroBB  profit  less  commlnslons . 824,870 

Legal  expenses,  adrertlsinK,  etc 80,000 

Net  profit,  «t  L09M8  per  cent  of  $25,000,000 274,870 

flSLaa 


BONDS  OF  NSW  TORK   OEHTBAL  R.   R.  175 

It  appears  that  the  main  itema  of  expense  comprising  the  $60,0(t[) 
were  approximately  ^,000  for  advertimng  aad  $15,000  for  legal 


Conditions  arising  out  of  the  war  have  radically  changed  the  char- 
acter of  the  investment  market  Evidence  was  offered  to  the  effect 
that  owing  to  the  heavy  income  tax  the  tendency  of  large  individual 
buyers  is  to  purchase  tax-free  securities.  High  returns  promised  in 
competing  lines  of  investment  deter  some  investors  from  investing 
freely  in  railroad  securities.  Higher  margins  on  the  placement  of 
certain  competing  investments  also  incline  distributors  to  prefer  the 
placement  of  the  latter.  The  banks,  moreover,  find  it  necessary  to 
use  their  funds  chiefly  for  commercial  purposes.  To  a  much  greater 
extent  than  heretofore  railroad  securities  must,  therefore,  be  sold 
to  small  buyers,  and  this  makes  necessary  more  comprehensive  and 
expensive  machinery  of  distribution.  Applicant  testified  that  it  had 
no  means  of  effecting  snch  distribution  upon  it«  own  account,  and 
that  it  resorted  to  J.  P.  Morgan  &  Company  because  of  that  firm's 
prestige  and  experience  and  established  connections  with  investment 
houses  all  over  the  country.  In  other  words,  Morgan  &  Company 
acted  as  middleman  between  the  corporation  and  the  distribution 
machinery  necessary  to  place  so  large  an  issue  of  securities,  and  in 
the  opinion  of  the  applicant  the  issue  could  not  have  been  effected  in 
any  other  way.  Evidence  was  also  offered  by  representatives  of  in- 
vestment houses  as  to  the  greatly  enhanced  cost  at  the  present  time 
of  distributing  securities,  because  of  increased  salaries,  higher  rents, 
the  necessity  of  appealing  to  a  wider  field  of  investors,  and  other 
factors  entering  into  the  conduct  of  the  business. 

We  have  thought  it  necessary  to  set  forth  in  detail  the  circum- 
stances and  cost  attending  the  marketing  of  the  proposed  issue  be- 
cause the  assurance  of  reasonable  terms  afforded  by  competitive  bids 
was  not  present.  In  saying  this  we  realize  that,  under  the  conditions 
prevailing  in  the  financial  world,  applicant  probably  could  not  have 
obtained  the  advantage  of  open  competition;  but  this  fact  merely 
emphasizes  the  necessity  of  our  considering  in  this  and  all  similar 
cases  the  terms  of  sale  which  we  arc  asked  to  approve.  In  the  present 
instance,  in  view  of  the  small  financial  risk  and  the  apparent  ease  with 
which  the  subscriptions  were  obtained,  we  think  the  discount  at  which 
the  bonds  were  sold  was  liberal.  The  evidence,  however,  is  not  suffi- 
cient to  justify  a  conclusion  that  the  cost  of  floating  the  issue  was 
such  that  we  ought,  under  all  the  circumstances,  to  withhold  approval 
of  the  terms  and  conditions  set  forth  in  applicant's  petition. 

The  subject  matter  is  plainly  one  deserving  of  attention,  and  it  is 
desirable  that  carriers  intending  to  present  applications  for  the  ap- 

«5j.ac 


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176  IITTBRSIATE  COHKBBOB  COHHISBIOH  BBPORIB. 

proval  of  security  issues  should  appreciate  that  Uie  proposed  temn 
and  conditions  will  be  the  subject  of  our  careful  consideration. 

We  Bnd,  upon  consideration  of  the  record,  that  the  proposed  issues 
of  bonds  by  the  applicant  are  consistent  with  the  conditions  laid  down 
by  law  as  to  legality,  necessity,  and  propriety,  and  that  the  applica- 
tion should  be  granted. 

An  order  will  be  entered  accordingly. 

ORDER. 

It  appearing.  That  the  New  York  Central  Railroad  Company,  m, 
common  carrier  by  railroad  engaged  in  interstate  commerce,  has 
made  application  to  this  Commission  under  section  20a  of  the  inter- 
state commerce  act  for  authority  to  issue  (1)  $25,000,000  of  10-year 
7  per  cent  collateral-trust  gold  bonds,  under  a  trust  agreement  to  be 
dated  September  1,  1920,  and  (2)  $25,000,000  of  refunding  and  im- 
provement mortgage  bonds,  series  B,  under  the  refunding  and  im- 
provement mortgage  dated  October  1,  1913,  executed  and  delivered 
by  the  New  York  Centra]  &  Hudson  River  Railroad  Company  (s 
predecessor  of  the  applicant),  which  by  a  supplemental  mortgage, 
dated  June  15,  1915,  was  assumed  by  the  applicant,  uad  whereby  the 
lien  of  said  mortgage  of  October  1,  1913,  was  extended ;  and 

It  further  appearing,  That  said  application  was  made  in  such  form 
and  contained  such  matters  as  the  Commission  prescribed,  and  that 
it  was  made  under  oath,  signed,  and  filed  on  behalf  of  said  carrier 
by  one  of  its  executive  officers  having  knowledge  of  the  matters 
therein  set  forth  and  duly  designated  for  that  purpose  by  the  car- 
rier; and 

It  further  appearing.  That  notice  of  the  filing  of  said  application 
has  been  given  to,  and  a  copy  thereof  filed  with  the  governors  of  the 
states  of  New  York,  New  Jersey,  Massachusetts,  Pennsylvania,  Ohio, 
Indiana,  Illinois,  and  Michigan,  the  only  stetes  in  which  said  carrier 
operates,  and  that  no  objection  to  the  issue  by  this  Commission  of  an 
order  granting  the  application  has  been  offered  by  the  railroad,  pub- 
lic service  or  utilities  commissions,  or  other  proper  state  authorities 
of  the  stetes  of  New  York,  New  Jersey,  Massachusetts,  Pennsyl- 
vania, Ohio,  Indiana,  or  Illinois;  and  that  the  Michigan  Public 
Utilities  Commission  has  filed  answer  to  said  application,  malring 
such  representations  as  it  deemed  just  and  proper  for  preserving  and 
conserving  the  interests  of  the  people  of  the  state  of  Michigan ;  and 

It  further  appearing.  That  the  application  has  been  duly  heard 
and  submitted  and  full  investigation  of  the  matters  and  "things  in- 
volved in  this  proceeding  has  been  had : 

Held,  That  the  proposed  issues  of  said  bonds  by  the  New  York  Cen- 
tral Railroad  Company  (a)  are  for  a  lawful  object  within  its  corpo- 

60 1,  c.  a 


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BONDS  OF   KBW  TORK  CENTRAL  R.  B.  177 

rate  purposes,  and  compatible  with  the  public  interest,  which  is 
necesnry  and  appropriate  for  and  consistent  with  the  proper  per- 
formance by  it  of  service  to  the  pablic  as  a  common  carrier,  and 
which  will  not  impair  its  ability  to  perform  that  service;  and  (b) 
are  reasonably  necessary  and  appropriate  for  such  purpose. 

/t  is  therefore  ordered,  That  the  New  York  Central  Kailroad  Com- 
pany be,  and  it  is  hereby,  authorized  (1)  to  issue,  as  of  the  date  of 
September  1,  1920  (but,  if  registered  bonds,  without  coupons,  as  of 
the  date  of  issue),  $26,000,000  of  bonds  to  be  known  as  10-year  7  per 
cent  collateral-trust  gold  bonds,  to  be  issued  under  and  pursuant  to, 
and  to  be  secured  by,  a  trust  agreement  to  be  entered  into  between 
the  New  York  Central  Railroad  Company  and  the  Guaranty  Trust 
Company  of  New  York,  to  be  dated  September  1, 1920;  said  bonds  to 
bear  interest  at  the  rate  of  7  per  cent  per  annum,  payable  semian- 
nually, on  the  Ist  day  of  March  and  the  1st  day  of  September  of  each 
year,  and  the  principal  of  such  bonds  to  be  payable  September  1, 
1980;  and  said  bonds  to  be  redeemable  at  the  option  of  the  New  York 
Central  Railroad  Company  on  any  interest  day  at  105  per  cent  of 
par  value,  together  with  accrued  interest,  as  provided  in  the  trust 
agreement;  there  to  be  pledged  with  the  Guaranty  Trust  Company  of 
New  York,  as  trustee,  as  security  for  the  payment  of  the  aforemen- 
tioned bonds,  principal  and  interest,  $26,000,000  of  the  refunding  and 
improvement  mortgage  bonds,  series  B  (the  issue  of  which  by  the 
New  York  Central  Railroad  Company  is  hereinafter  authorized), 
together  with  75,000  shares  of  the  first-preferred  capital  stock  and 
110,000  shares  of  the  second-preferred  capital  stock  of  the  Reading 
Company,  a  Pennsylvania  corporation,  said  first-preferred  and  said 
second-preferred  stock  being  of  the  par  value  of  $50  per  share,  witJi 
authority  for  making  withdrawals  and  substitutions  of  pledged 
securities  as  In  said  trust  agreement  provided ;  said  10-;ear  bonds  to 
be  issued  as  coupon  and/or  registered  bonds  in  the  forms  for  such 
bonds  set  forth  in  the  copy  of  the  trust  agreement  of  September  1, 
1920,  filed  with  the  application,  which  forms  are  hereby  approved; 
said  10-year  bonds  to  be  sold  at  a  price  not  less  than  96.5  per  cent  of 
par,  and  accrued  interest,  and  the  proceeds  of  sale  to  be  used  as 
follows:  $506,000  thereof  to  be  used  to  reimburse  the  treasury  of  the 
applicant  for  payment  of  matured  prior  debt,  namely,  first-mortgage 
5  per  cent  bonds  of  the  Norwood  &  Montreal  Railroad  Company 
which  matured  April  1, 1916,  $180,000;  and  first-mortgage  5  per  cent 
bonds  of  the  Rome,  Watertown  &  Ogdensburg  Terminal  Railroad 
Company  which  matured  May  1,  1918,  $375,000;  not  exceeding  the 
sum  of  $16,000,000  in  payment  of  the  one-year  6  per  cent  collateral- 
trust  gold  notes  in  the  principal  amount  of  $15,000,000,  maturing 
September  15,  19S0,  which  notes  were  issued  by  the  New  York  Can- 
66344*— 22~Vol  65 13  , 

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D.,.radb,G0(lgle 


BONDS  or  KXW  TOBK  OBNTBAL  B.  B.  179 

be  released  from  such  pled^  and  canceled  by  the  New  York  Central 
Bailroad  Company ;  (2)  that  the  proceeds  of  said  lO-ye&r  7  per  cent 
oollateral-trost  gold  bonds  shall  not  be  used  for  any  purposes  other 
than  thoee  specified  in  said  application;  (8)  that  said  refunding 
and  improvement  mortgage  bonds,  series  B,  shall  not  be  used  for 
any  purpose  other  than  that  specified  in  said  application,  namely, 
as  security  for  aaid  10-year  7  per  cent  collateral-trust  gold  bonds; 
(4)  that  said  applicant  shall  furnish  to  this  Commission  periodical 
statements  showing  all  pertinent  facts  in  connection  with  the  use  of 
the  proceeds  of  said  10-year  7  per  cent  collateral-trust  gold  bonds, 
the  first  statement  to  me  made  60  days  after  the  date  of  this  ordw 
and  subsequent  statements  to  be  made  every  60  days  thereafter,  until 
all  of  said  proceeds  shall  have  been  used ;  and  (6)  that  said  applicant 
shall  make  report  to  this  Commission  of  the  deposit  and  pledge  of 
said  refunding  and  improvement  mortgage  bonds,  series  B,  within 
10  days  after  the  same  shall  have  been  deposited  with  the  Guaran^ 
Trust  Company  of  New  York  as  security  as  aforesaid,  and  that 
said  applicant  shall  make  report  to  this  Commission  of  the  release 
of  said  bonds  from  such  pledge  within  10  days  after  they  shall  have 
been  so  released. 

And  it  U  fwther  ordered.  That  nothing  herein  shall  be  construed 
to  imply  any  guaranty  or  obligation  as  to  said  10-year  7  per  cent 
collateral-trust  gold  bonds  or  said  refunding  and  improvement 
mortgage  bonds,  series  B,  or  as  to  interest  thereon,  on  the  part  of 
the  United  States. 

65Laa 


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178  INTEBSTATE  COMMKROE  COMMISSION  BHP0B3S. 

tral  Railroad  Ckimpsny  and  secured  by  a  trust  agreement  datad 
September  16, 1919,  between  said  railroad  comp&ny  and  the  Guaraoty 
TruBt  Company  of  Kew  York,  as  tmstee,  the  proceeds  of  said  notes 
having  been  used  to  take  up  and  pay  certain  two-year  5  per  cent  col- 
lateral-trust gold  notes  in  the  principal  amount  of  $15,000,000,  said 
two-year  notes  having  been  issued  in  connection  with  reimbursement 
of  the  treasury  of  the  applicant  for  expenditures  for  capital  purposes 
(a  list  of  which  expenditures  appears  in  schedule  A  accompanying 
the  application),  and  the  balance  of  the  proceeds  of  said  |S6,000,000 
10-year  7  per  cent  collateral-trust  gold  bonds  to  be  used  to  reimburse 
the  treasury  of  the  applicant  for  expenditures  made  for  capital  pur- 
poses {a  list  of  which  is  given  in  schedule  C  accompanying  the  appli- 
cation),  and  expenditures  to  be  made  for  capital  purposes  (a  list  of 
which  is  given  in  schedide  D  accompanying  the  application) ;  and 
(2)  to  issue,  as  of  the  date  of  April  1, 1920,  $25,000,000  of  refunding 
and  improvement  mortgage  bonds,  series  B,  said  bonds  to  be  issued 
under  and  pursuant  to,  and  to  be  secured  by,  the  refunding  and  im- 
provement mortgage  dat«d  October  1, 1913,  heretofore  executed  and 
delivered  by  the  New  York  Central  &  Hudson  Kiver  Kailroad  Com- 
pany (a  predecessor  of  the  New  York  Central  Railroad  Company) 
to  the  Guaranty  Trust  Company  of  New  York,  which  by  a  supple- 
mental mortgage  dated  June  15, 1915,  was  assumed  by  the  New  York 
Central  Railroad  Company,  and  whereby  the  lien  of  said  mortgage 
of  October  1, 1913,  was  extended ;  said  series-B  bonds  to  be  issued  as 
coupon  and/or  registered  bonds  and  to  bear  interest  at  the  rate  of 
6  per  cent  per  annum,  payable  semiannually,  on  the  Ist  day  of  April 
and  the  Ist  day  of  October  in  each  year;  the  principal  thereof  to  be 
payable  October  1,  2013;  said  bonds  to  be  redeemable,  at  the  option 
of  the  New  York  Central  Railroad  Company,  on  any  interest  day,  at 
102.6  per  cent  of  par  value,  together  with  accrued  interest,  in  the 
manner  provided  in  said  mortgage;  said  series-B  bonds  to  be  de- 
posited, together  with  other  securities  as  hereinbefore  mentioned, 
with  the  Guaranty  Trust  Company  of  New  York,  trustee,  imder  the 
agreement  of  September  1,  1920,  as  security  for  the  issue  of 
$26,000,000  of  10-year  7  per  cent  collateral-trust  gold  bonds  herein- 
before authorized,  said  series-B  bonds  to  be  used  solely  as  such 
security  until  otherwise  ordered  by  this  Commission. 

It  ia  further  ordered,  That  the  authorizations  herein  granted  are 
conditioned  upon  the  faithful  performance  of  the  following  pro- 
visions: (1)  That  prior  to  or  contemporaneously  with  the  issue  of 
said  $25,000,000  of  refunding  and  improvement  mortgage  bonds, 
series  B,  the  $20,000,000  of  refunding  and  improvement  mortgage 
bonds,  series  A,  which  are  now  pledged  with  the  Guaranty  Trust 
Company  of  New  York  to  secure  $15,000,000  of  one-year  notes,  shall 

flS  I.  G.  G. 


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tVSAL.  SBTTLSMBNI  WITH  UTTLE  COTTONWOOD  CO. 


FnCANOB  DOCKBT  No.  166. 

IK  THE  MATTER  OF  FINAL-  SETTLEMENT  WITH  THE 
LITTLE  COTTONWOOD  TRANSPORTATION  COMPANY 
UNDER  SECTION  204  OF  THE  TRANSPORTATION  ACT, 


BmbmUtei  Jwly  B.  ino.    DtOUei  Beptemhor  IS,  mo. 


1.  The  Little  Cottonwood  Tninsportatlon  Conipanf  la  mibject  to  section  204 

of  tlie  truuportaUon  act,  1920. 

2.  Tbe  amonnt  payable  to  ttie  Little  Cktttonwood  Transportation  Company 

under  the  provlalonB  at  pa^'agrmphs  (f )  and  (g)  of  eectlon  204  Is  ascer- 
tained to  be  $3S,QT3.32,  from  which  there  Is  deductible  (6,922.70  as  due 
from  said  Little  Cottonwood  Tran^tortatlon  Company  to  the  President 
<«■  operator  of  the  tnnaportatlon  systems  ander  federal  costrol)  on 
acconnt  of  traffic  balauoes  aod  other  indebtedness.  CertlOcate  Isiued. 
John  B.  Pruyn  for  th«  carrier. 

Report  of  the  Cohuission, 
Division  1,  CouHiasioNBBs  Mkxex,  Daniels,  Eastman,  and  Potteb. 
Bt  Division  4 : 

The  Little  Cottonwood  Traosportatioo  Company,  a  corporation  of 
the  state  of  Maine,  hereioafter  termed  the  carrier,  is  a  steam  railroad 
company  which  during  the  federal-control  period  engaged  as  a  com- 
mon carrier  in  general  transportation,  operating  a  railroad  between 
Wasatch,  Utah,  and  the  silver,  copper,  and  lead  mines  located  in  the 
Little  Cottonwood  canyon,  Utah,  a  distance  of  approximately  S.S 
miles,  its  lines  connecting  at  Wasatch  with  the  Denver  &  Rio  Grande 
Railroad,  a  line  of  railway  or  system  of  transportation  under  federal 
control.  It  sustained  a  deficit  in  its  railway  operating  income  while 
under  private  operation  in  the  federal-control  period.  It  is  therefore 
a  carrier  within  the  meaning  of  paragraph  (a)  of  section  204  of  the 
transportation  act,  1920.    It  commenced  operations  on  April  1, 1918. 

The  carrier  is  subject  to  the  provisions  of  section  S04  from  the  . 
commencement  of  operations  on  April  1,  1918,  to  February  29, 1920, 
inclusive.  It  did  not  have  a  cooperative  contract  or  other  contract 
with  the  Director  General  for  any  portion  of  the  federal-control 
period.  The  return  of  the  carrier  under  our  circular  of  March  4, 
1920,  indicated  that  its  deficit  in  railway  operating  inctnne  for  the 
period  April  1,  1918,  to  February  29, 1920,  inclusive,  was  $39,073.53, 
but  our  examination  of  the  accounts  ^ows  the  correct  amount  for 
eci.aa 


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190  INTEBSTATB  OOMICBBOI  O0Hin8SK>N  KBFOBIB. 

that  period  to  be  $89,078.88.  The  operated  nuletge  during  tba 
federal-control  period  was  8^  miles. 

We  find  a  net  amoant  of  $39,073.88  due  the  carrier  ander  said  sec- 
tion 204  in  reimbursement  of  deficits  during  federal  control,  froia 
which  there  is  deductible  an  amount  of  $6,922.70,  due  from  the  car- 
rier to  the  President,  as  operator  of  the  transportation  systems  under 
federal  control,  on  account  of  traffic  balances  and  other  indebtedness. 
The  carrier  has  expressed  its  willingness  to  accept  the  amount  thus 
determined  by  us  in  Snal  settlement  of  all  its  claims  against  the 
United  States  under  section  204. 

An  appropriate  certificate  will  be  issued. 


Certificate  No.  A~€6  for  Reimbwraement  of  Deficit  under  Federal 
Control,  Section  £04,  Trantportaiion  Act,  1S&). 

To  THE  ^CRBTABT  OF  THE  TrEASDBT  : 

Pursuant  to  section  204  of  the  transportation  aot,  1920,  the  Inter- 
state  Conmierce  ConunissioD  has  ascertained  from  annual  and  speciftl 
reports  made  to  it  by  the  Little  Cottonwood  Transportation  Com- 
pany, a  carrier  as  defined  in  section  204,  that  the  Little  Cot- 
tonwood Transportation  Company,  during  the  period  of  federal 
control,  taken  as  a  whole,  sustained  a  railway  operating  deficit, 
and  hereby  certifies  that  under  the  provisiona  of  paragraphs 
(f )  and  (g)  of  said  section  204  there  is  payable  to  the  said  Little 
Cottonwood  Transportation  Company  the  sum  of  $89,078.82. 

The  Conmiission  also  hereby  certifies  that  the  amount  due  from 
the  said  Little  Cottonwood  Transportation  Company  to  the  Presi- 
dent (as  operi^r  of  the  transportation  systems  under  federal  con- 
trol) on  account  of  traffic  balances  and  other  indebtedness  is  $6,922.70. 

Dated  this  16th  day  of  September,  1920. 

85 1.  G.  a 


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nOTEB  OF  ANN  ABBOB  B.   B. 


Finance  Docket  No.  51. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  ANN 

ARBOR  RAILROAD  COMPANY   FOR  AUTHORITY  TO 

ISSUE  NOTES  IN  PROCUREMENT  OF  LOCOMOTIVES. 


Submitted  aeptember  17, 19S0.    Deotdvi  September  tt,  IBSO. 


Authority  Branted  (or  Issue  of  twelve  6  per  cent  notes  Bggregatliig  |S2,2S0,  tbe 
proceeds  to  be  used  In  procurement  of  two  switching  locomotives. 

Atewander  L.  Smith  for  applicBnt. 

BSFORT  AND   OrDBB   OF  THB   C0HHI88ION. 

Division  4,  Comhissionebs  Metgb,  Danhu,  Eastman,  and  Potter. 

Bt  Division  4 : 

It  appearing,  That  the  Ann  Arbor  Railroad  Company,  a  oonunoD 
carrier  by  railroad  engaged  in  interstate  commerce,  has  made  appli- 
cation to  this  Commission  under  section  20a  of  the  interstate  com- 
merce act  for  authority  to  issue  a  series  of  12  notes  for  $6,190  each, 
aggregating  $62,280;  said  notes  to  be  numbered  from  1  to  12,  in- 
cluaive,  to  be  payable  quarterly  from  September  15,  1920,  to  Jane 
15,  1923,  and  to  bear  interest  at  6  per  cent  per  annum,  payable  semi- 
annually  and  as  said  ootee  mature,  said  notes  to  be  used  for  tbe 
purpose  of  procuring  two  22.5-inch  by  2S-inch  (080-203)  eight-wheel 
switching  locomotives  from  the  American  Locomotive  Works,  at  the 
price  of  $38^5  each;  a  total  of  $77,850,  $15,570  of  said  total  to  be 
covered  by  a  cash  payment  and  the  balance  to  be  covered  by  said  IS 
notes;  and 

It  fwrth£r  appearing.  That  said  application  was  made  in  such  form 
and  contained  such  matters  as  the  Commission  prescribed,  and  that 
it  was  made  under  oath,  signed,  and  filed  on  behalf  of  said  carrier 
by  one  of  its  executive  officers  having  knowledge  of  the  matters  tiiere- 
iu  set  forth ;  and  duly  designated  for  that  purpose  by  the  carrier ;  and 

It  fvrther  aippearvng.  That  notice  of  the  filing  of  said  application 
has  been  given  to,  and  a  copy  thereof  filed  with,  the  governors  of  the 
states  of  Michigan  and  Ohio,  the  tmly  states  in  which  said  carrier 
operates,  as  required  by  said  section  20a,  and  that  no  objection  to  the 
issuance  by  this  Commission  of  an  order  granting  the  application 
has  been  offered  by  the  railroad,  public  service  or  utilities  commis- 
nons,  or  other  appropriate  authorities  of  said  states ;  and 

It  further  appearing.  That  full  investigation  of  the  matters  and 
things  involved  in  this  proceeding  has  been  bad: 


flo  I.  a  c. 


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192  IHTBBSTATB  OOlflCBBCB  OOMUISSION   EEPOBTS. 

Held,  That  th«  proposed  issue  of  said  eeriea  of  notes  by  th«  Ajin 
Arbor  Railroad  Company  (a)  is  for  a  lawful  object  within  its  cor- 
porate purposes,  and  compatible  with  the  public  interest,  which  is 
necessary  and  appropriate  for  and  consistent  with  the  proper  per- 
formance by  it  of  service  to  the  public  as  a  common  carrier,  and 
which  will  not  impair  its  ability  to  perform  that  service;  and  (b)  is 
reasonably  necessary  and  appropriate  for  such  purpose. 

It  ts  therefore  ordered,  That  the  Ann  Arbor  Bailroad  Company  be, 
and  is  hereby,  authorized  to  issue,  as  of  the  date  of  June  15,  1920,  12 
notes  in  the  sum  of  $5,190  each,  these  notes  to  be  numbered  from  1  to 
12,  inclusive,  and  the  principal  amounts  of  said  notes  respectively  to 
be  payable  on  September  15  and  December  15,  1920,  March  15,  June 
16,  September  16,  and  December  16, 1921,  March  15,  June  15,  Septem- 
ber 16,  and  December  15,  1922,  and  March  16  and  June  16,  1928, 
and  to  bear  interest  at  the  rate  of  6  per  cent  per  annum,  payable 
semiannually  and  as  the  notes  mature;  said  notes  to  be  issued  under 
and  pursuant  to  an  agreement  dated  June  16,  1920,  by  and  between 
the  American  Locomotive  Company,  the  applicant,  and  the  Empire 
Trust  Company,  said  Empire  Trust  Company  being  trustee  under 
a  certain  improvement  and  extension  mortgage  dated  May  1,  1911, 
made  by  the  railroad  company  to  the  Empire  Trust  Company,  as 
trustee,  to  secure  an  issue  of  $10,000,000  of  improvement  and  exten- 
sion mortgage  80-year  5  per  cent  gold  bondfi;  said  notes  to  be  used 
at  not  less  than  par  in  procurement  of  said  switching  locomotives 
in  accordance  with  the  terms  of  the  agreement  of  June  15,  1920, 
and  said  notes  to  be  in  the  form  submitted  with  the  application, 
which  form  is  hereby  approved. 

/t  is  further  ordered,  That  the  authorization  herein  granted  is 
conditioned  upon  the  faithful  performance  of  the  following  pro- 
visions: (1)  That  said  notes,  or  the  proceeds  thereof,  shall  not  be 
used  for  any  purposes  other  than  those  specified  in  the  application : 
and  (2)  that  the  applicant  shall  make  report  to  this  Commission 
of  the  issue  and  use  of  said  notes  or  proceeds  thereof,  as  herein 
authorized,  within  10  days  after  the  same  shall  have  been  so  issued 
and  used,  and  that  said  applicant  shall  make  report  to  this  Conmiis- 
■ion  of  the  payment  of  said  notes  within  10  days  after  the  said  notes 
are  respectively  paid. 

And  it  it  fvrther  ordered,  That  nothing  herein  shall  be  construed  to 
imply  any  guaranty  or  obligation  as  to  said  notes,  or  interest  thereon, 
on  the  part  of  the  United  States. 

«6i.aa 


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CEBTlrlOATBS  OF  KAHSA5  CITY,  HBXICO  *  OBIBNI  B.  B,      198 


FlNAMCB  DoCKJfT   No.   63. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  RE- 
CEIVER OF  THE  KANSAS  CITY,  MEXICO  &  ORIENT 
RAILROAD  COMPANY  FOB  AUTHORITY  TO  ISSUE 
RECEIVER'S  CERTIFICATES. 


Submitted  SflplembM-  19,  IBtO.    Decided  Beptmnber  t»,  IMO. 


Anttaorlt7  granted  to  luae  (1,000,000  of  receiver's  certmcatea  beartng  tnt«-Mt 
at  the  rate  of  6  per  cent  per  anDnm  and  matiirlaK  December  1.  1B20. 

Clifford  Hiated  for  applicant 

Repobt  and  Obdis  of  thb  ComuiBsioN. 

DiTIBION  4,  COMMISSIONEBS  MsTBR,  DaNIKLS,  EaSTMAN,  AMD  PoTTEB. 

BtDitision  4: 

It  appearing.  That  William  T.  Kemper,  nearer  of  the  Kansas 
City,  Mexico  &  Orient  Railroad  Company,  a  common  carrier  by  rail- 
road engaged  in  interstate  commerce,  haa  made  application  to  this 
Commiseion  under  section  SOa  of  the  interstate  commerce  act  (or 
authority  to  sell  at  par  receiver's  certificates  fw  $1,000,000  with 
interest  at  6  per  cent  per  annum,  maturing  December  1,  1920,  in 
order  to  pay  for  coal  and  other  supplies  necessary  for  the  con- 
tinued operation  of  said  railroad ;  and 

It  further  appearing,  That  said  application  was  made  in  such  form 
and  contained  such  matters  as  the  Commission  prescribed,  and  that  it 
was  made  under  oath,  signed,  and  filed  on  behalf  of  said  carrier  by 
the  receiver  duly  appointed  by  order  of  court  and  having  knowledge 
of  the  matters  therein  set  forth,  and  duly  designated  for  that  pur- 
pose by  the  court ;  and 

It  further  appearing,  That  notice  of  the  filing  of  said  application 
has  been  given  to,  and  copies  thereof  filed  with,  the  governor  of  each 
of  the  states  in  which  said  carrier  operates,  and  that  no  objection  to 
the  issue  by  the  Commission  of  an  order  granting  the  application  ha« 
been  made  by  any  state  authority ;  and 

It  further  appearing.  That  full  investigation  of  the  matters  and 
things  involved  in  this  proceeding  has  been  had ; 

Held,  That  the  proposed  issue  and  sale  of  said  receiver's  certificates 
at  par  by  the  receiver  of  the  Kansas  City,  Mexico  &,  Orient  Rail- 
road Company  (a)  are  for  a  lawful  object  within  the  corporate  pur- 
poses of  the  Kansas  City,  Mexico  ft  Orient  Railroad  Company,  and 
compatible  with  the  public  interest,  which  is  necessary  and  appro- 


en  z...,CoOgIc 


194  UrrSBSTATS  ooumerce  cx^umission  bbpoetb. 

priate  for  and  consistent  with  the  proper  performance  by  it  of  serv- 
ice to  the  public  as  a  common  carrier,  and  which  will  not  impair  its 
ability  to  perform  that  service;  and  (6)  are  reasonably  necessary  and 
appropriate  for  such  purpose. 

It  is  therefore  ordered^  That  William  T.  Kemper,  receiver  of  the 
Kansas  City,  Mexico  &  Orient  Bailroad  Company,  be,  and  he  is 
hereby,  authorized  to  issue,  negotiate,  and  sell  at  par  receiver's  cer- 
tificates in  a  principal  amount  of  $1,000,000,  in  pursuance  of  and  in 
accordance  with  the  order  and  decree  of  court,  made  and  entered  on 
September  9, 1920,  in  the  case  of  The  Trustees  Corporation,  Limited., 
and  Columbia  Trust  Company  v.  The  Kansas  City,  Mexico  f&  Orient 
Railroad  Company  et  al,,  consolidated  cause  No.  239'N,  pending 
in  the  district  court  of  the  United  States  for  the  district  of  Kansas, 
first  division ;  said  receiver's  ceriiificates  to  be  payable  December  1, 
1920,  and  to  bear  interest  at  the  rats  of  6  per  cent  per  annum,  and 
to  be  in  the  form  set  forth  in  the  aforementioned  order  and  decree, 
a  certified  copy  of  which  order  has  been  filed  in  this  proceeding, 
which  form  of  certificate  is  hereby  approved. 

It  is  further  ordered.  That  Hie  proceeds  of  said  receiver's  certifi- 
cates shall  be  used  for  the  purchase  of  cdal  and  other  supplies  neces- 
sary in  the  continued  operation  of  said  railroad  and  for  such  other 
purposes  only,  as  vn  set  fortli  in  said  application. 

It  is  further  ordered,  That  said  applicant  shall  make  report  to 
this  Commission  of  the  issue,  negotiation,  and  sale  of  said  receiver's 
certificates  within  10  days  aftm*  the  same  shall  have  been  so  issued, 
negotiated,  or  sold ;  and  that  said  applicant  shall  make  report  to  this 
Commission  of  the  redemption  or  payment  of  said  certificates  within 
10  days  after  the  same  shall  have  been  so  redeemed  or  paid. 
.  And  it  is  further  ordered,  That  nothing  heruu  shall  be  construed 
to  imply  any  guaranty  or  obligation  as  to  said  receiver's  certificates, 
or  interest  thereon,  on  the  part  of  the  United  States. 

6si.c.a 


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lAAlf  TO  TBBMJNAL  B.   B.  A8S0. 


Finance  Docket  No.  1023. 


IN  THE  MATTEK  OF  THE  APPLICATION  OF  THE  TER- 
MINAL  RAILROAD  ASSOCIATION  OF  ST.  LOUIS  FOB 
A  LOAN  FROM  THE  UNITED  STATES  TO  AID  IN  MEET- 
ING MATURING  INDEBTEDNESS  AND  IN  MAKING 
ADDITIONS  AND  BETTERMENTS. 

Approved  by  the  Commianon,  Division  4,  September  23, 1920. 


DinsioK  4,  CoMiassioNEBS  Meteb,  Danieu,  and  Eastman. 


Amended  Certificate  No.  £0  for  a  Loan  under  Season  810  of  the 
Tranaportaiion  Act,  19B0,  as  Amended. 

The  Interstate  Commerce  Commission  certifies  to  the  Secretary  of 
the  Treasury  its  findings: 

1.  That  the  making  of  a  loan  of  $896,925  by  the  United  States  to 
the  Terminal  Railroad  Association  of  St.  Louis,  hereinafter  referred 
to  as  the  applicant,  for  the  purposes  of  aiding  applicant  to  make 
additions  and  betterments  and  meet  its  maturing  indebtedness,  is 
necessary  to  enable  the  applicant  properly  to  meet  the  transporta- 
tion needs  of  the  public 

2.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  furnish 
reasonable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor  and  to  meet  its  other  obligations  in 
connection  with  such  loan. 

3.  That  the  amount  of  the  loan  which  is  to  be  made  is  $896,926. 

4.  That  the  time  from  the  making  thereof  within  which  the  loan 
it  to  be  repaid  in  full  is  15  years. 

5.  That  the  terms  and  conditions  of  the  loan,  including  the  security 
to  be  given  for  repayment,  are — 

(a)  The  loan  for  maturities  shall  be  for  $377,760,  maturing  five 
years  from  the  date  thereof,  and  shall  be  collaterally  secured  by  the 
pledge  of  Terminal  Railroad  AssociatioD  of  St.  Louis  general- 
mortgage  refunding  4  per  cent  sinking-fund  gold  txmds,^  dated 
January  1, 1903,  and  maturing  January  1,  1953,  in  the  par  value  of 
$697,000.  Said  bonds  are  of  the  denomination  of  $1,000  and  are 
numbered  as  follows:  27664  to  28260,  inclosive,  a  total  of  697  bonds. 

(b)  The  loan  for  additions  and  betterments  shall  be  for  $619,175, 
maturing  15  years  from  the  date  thereof,  and  shall  be  collaterally 
secured  by  the  pledge  of  Terminal  Railroad  Association  of  St.  Louis 

«  i.0.a  I 


196  IKTBBSTATE  OOMMEBOK  O0MUI8SI0V  BBPOBTS. 

general-mortgage  refunding  4  per  cent  sinking-fund  gold  Ixmds, 
dated  January  1,  1903,  and  maturing  January  1,  1953,  in  the  par 
value  of  $963,000.  Said  bonds  are  of  the  denomination  of  $1,000, 
and  are  numbered  as  follows:  28261  to  28463,  isclusive;  24643  to 
248fi7,  inclusive ;  and  28464  to  S9008,  inclusive,  a  total  of  968  bonds. 

(c)  The  applicant  shall,  on  demand  of  the  Secretary  of  the  Treas- 
ury, with  the  concurrence  of  the  Interstate  Commerce  Commission, 
deposit  with  the  Secretary  of  the  Treasury  such  additional  security 
as  may  be  from  time  to  time  required ;  the  securities  pledged,  together 
with  any  that  may  be  pledged  hereafter,  or  may  have  been  pledged 
heretofore,  as  securify  for  this  loan  or  any  other  obligation  of  the 
said  applicant  to  the  United  States,  for  loans  made  under  section 
210  of  the  transportation  act,  1920,  as  amended,  shall  be  applicable 
in  like  manner  to  secure  the  payment  of  any  and  all  such  loans. 

{d)  Applicant  shall  have  the  privilege  of  paying  all  or  any  part 
of  the  loan  at  any  time  before  maturity. 

(e)  The  collateral  security  for  the  loan  shall  be  released  pro- 
portionately as  parte  of  the  loan  are  paid. 

(/)  The  applicant  has  agreed,  in  an  instrument  in  writing,  dated 
the  23d  day  of  September,  1920,  filed  with  the  Interstate  Commerce 
Commission,  to  the  following  conditions:  (1)  That  the  amount  to 
be  financed  by  it  in  connection  with  the  loan  shall  be  so  financed 
that  the  cost  to  it  of  any  loans  secured  from  sources  other  than  the 
United  States  government  shall  not  exceed  7  per  cent  per  annum, 
including  in  such  cost  discount,  tttomeyB*  fees,  and  any  and  all 
other  expenses  in  connection  therewith;  (2)  the  expenditures  made 
from  the  loan  for  additions  and  betterments  shall  be  confined  to 
such  expenditures  as  may  be  chargeable  to  accounts  for  investment 
in  road  and  equipm^t  provided  in  the  Commission's  accounting 
classification  for  steam  roads  in  effect  at  the  time  the  expenditures 
may  be  made;  (3)  the  applicant  shall  famish  the  Commission  on 
or  about  January  1,  and  July  1, 1921,  the  detailed  certificate,  under 
oath  of  its  chief  engineer,  showing  the  character  and  costs  of  the 
additions  and  betterments  made  with  or  in  connection  with  this  loan 
for  said  purposes.  The  loan  for  additions  and  betterments  shall 
have  been  expended  or  definitely  obligated  for  the  purposes  for  which 
loaned,  or  shall  be  repaid  to  tiie  United  States,  on  or  before  Novem- 
ber 1,  1921.  In  the  event  that  the  Commission  shall  certify  to  the 
Secretary  of  the  Treasury  that  the  applicant  has  failed  or  refused 
well  and  truly  to  comply  with  any  one  or  more  of  the  terms  and  con- 
ditions contained  in  said  agreement,  the  whole  or  any  part  of  the 
obligations  evidencing  the  loan,  as  the  Commission  may  designate, 
shall  at  the  option  of  the  holder,  become  due  and  payable. 

06 1,  a  a 


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LOAN  TO  TBBHmiX  B.  B.  A8S0.  197 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish,  in 
the  opinion  of  the  Commission,  reasonable  assurance  of  the  appli- 
cant's ability  to  repay  the  loan  within  the  time  fixed  tiierefor,  and 
reasonable  protection  to  the  United  States, 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  itself  from  other  sources,  -with  the  funds  necessary  for 
the  aforesaid  purposes. 

Done  in  Washington,  D.  C,  this  23d  day  of  September,  1920. 
65LC.a 


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TKTEBSTATB  COMMEBCB  OOUMISSIOS  BEPOBTS. 


Finance  Docket  No.  47. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  WA- 
BASH RAILWAY  COMPANY  FOR  AUTHORITY  TO  EX- 
CHANGE CONVERTIBLE  PREFERRED  STOCK. 


Submitted  September  10,  1920.    Deoided  Beptember  25,  ISftO. 


Aatborltr  granted  for  tbe  ezdtange  of  $15,152^41.79  of  5  pa*  cent  convertible 
preferred  stock  B  for  (7,676,1^.89  of  6  per  cent  proflt-sbarlng  preferred 
stock  A  and  $7,576,120.89  Of  common  stock  at  tbe  rate  of  $00  of  preferred 
stock  A  and  $50  of  common  stock  for  each  $100  of  preferred  stock  B,  pur- 
suant to  the  provisions  of  tlie  apidicant's  certificate  of  Incorporation. 

Lawrence  Greer  for  applicant. 

Rbfokt  and  Ordeb  of  the  Cohhission. 
Division  4,  CoMMieaiONERB  Meter,  Daniei.s,  Eastman,,  and  Potteb. 
By  Division  4: 

It  appearing^  That  the  Wabash  Railway  Company,  a  common  car- 
rier by  railroad  engaged  in  interstate  commerce,  has  applied  to  this 
Commission  under  section  20a  of  the  interstate  commerce  act  for 
authority  to  continue  to  convert  from  time  to  time  not  exceeding 
$15,132,241.79  of  its  5  per  cent  convertible  preferred  stock  B  into  not 
exceeding  $7,576,120.89  of  its  5  per  cent  profit-sharing  preferred 
stock  A  and  not  exceeding  $7,576,120.69  of  its  common  stock,  at  the 
rate  of  $50  of  preferred  stock  A  and  $50  of  common  stock  for  each 
$100  of  preferred  stock  B,  pursuant  to  the  provisions  of  its  certifi- 
cate of  incorporation,  and  for  that  purpose  to  continue  the  issuance 
of  its  preferred  stock  A  and  of  its  common  stock  in  the  amounts 
specified ;  and 

It  further  appearing.  That  said  application  was  made  in  such  form 
and  contained  such  matters  as  the  Commission  prescribed,  and  that 
it  was  made  under  oath,  signed,  and  filed  on  behalf  of  said  carrier 
by  one  of  its  executive  officers  having  knowledge  of  the  matters 
therein  set  forth,  and  duly  designated  for  that  purpose  by  the  car- 
rier; and 

It  further  appearing.  That  notice  of  the  filing  of  said  application 
has  been  given  to,  and  a  copy  thereof  filed  with,  the  governors  of 
the  states  of  Iowa,  Missouri,  Illinois,  Indiana,  Michigan,  and  Ohio, 
the  only  states  in  which  the  carrier  operates,  as  required  by  section 
20a,  and  that  no  objection  has  been  offered  by  the  railroad  commia- 
sion,  or  other  appropriate  authority  of  any  of  said  states ;  and 

66Laa 


STOCK  07  WABASH  BT.  189  ' 

It  fvrther  appeasing,  That  fall  investigation  of  th.t  matters  and 
things  inTolved  in  this  proceeding  has  been  had : 

Bdd,  That  the  proposed  conversion  and  exchange  of  said  stocks 
by  the  Wabash  Railway  Company  (a)  are  for  a  lawful  object  within 
its  corporate  purpoaee,  and  compatible  with  ttie  pablio  interest, 
which  are  necessary  and  appropriate  for  and  consistent  witti  the 
proper  performance  by  it  of  service  to  the  public  as  a  common  car- 
rier, and  which  will  not  impair  its  ability  to  perform  that  service; 
and  (6)  are  reasonably  necessary  and  appropriate  for  such  purpose. 

It  is  therefore  ordered,  That  the  Wabash  Railway  Company  be, 
and  it  is  hereby,  authorized  to  continue,  in  accordance  with,  and  pur- 
suant to,  the  terms  of  its  certificate  of  incorporation  of  October  ^, 
1915,  a  true  copy  of  which  is  on  file  in  this  proceeding,  the  issue  of 
its  5  per  cent  profit-sharing  preferred  stock  A,  the  aggregate  amount 
to  be  issued  under  this  authority  not  to  exceed  $7,576,120.89,  and  of 
its  common  stock,  the  aggregate  amount  to  be  issued  under  this 
authority  not  to  exceed  $7,676,120.89,  and  the  exchange  of  said  pre- 
ferred stock  A  and  said  common  stock  for  its  6  per  cent  convertible 
preferred  stock  B,  now  outstuiding,  in  the  aggre^te  amount  of 
$15,162,241.79,  said  exchange  to  be  at  the  rate  of  $60  of  preferred 
stock  A  and  $50  of  common  stock  for  each  $100  of  preferred  stock  B. 

It  M  further  ordered,  That  the  applicant  shall,  on  or  before  De^ 
cember  81,  1920,  and  each  six  months  thereafter  i^itil  all  of  said  5 
per  cMit  convertible  preferred  stock  B  shall  have  been  exchanged 
for  5  per  cent  profit-sharing  preferred  stock  A  and  common  stoc^, 
as  herein  authorized,  report  to  this.  Commission  the  amount  of  stock  , 
so  exchanged,  eadi  report  to.be  signed  by  an  executive  officer  of  the 
applicant  having  knowledge  of  the  facts  and  verified  by  his  oath. 

And  it  is  further  ordered,  That  nothing  herein  shall  be  construed 
to  imply  any  guaranty  or  obligation  as  to  said  stock  on  the  part  of  ■ 
the  United  States. 

65 1,  c.  a 


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□TTBfiSTAIS  COMMEBCE  COHICSSIOK  SBPOBIS. 


Finance  Dookot  No.  970. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  ILLI- 
NOIS CENTRAL  RAILROAD  COMPANY  FOR  A  LOAN 
FROM  THE  UNITED  STATES  TO  PROVIDE  IN  PAKT 

FOE  PURCHASE  OF  NEW  EQUIPMENT. 


BnbmUUa  Avffust  H,  1920.    DetHded  Baptmnter  tS,  IStO. 


Upon  mppIemeuUI  application,  origlnBl  findine  modified  and  loan  of  $4,440,000 
aipproved. 
M.  P,  Blauvelt  for  applicant. 

SnPPLEUENTAL  ReFORT  Or  THE  C0HKI88ION. 

DinaiON  4,  CouuisaioNERs  Mbteb,  Danibls,  EAffrHAN,  anp  Pottbk. 
Bt  DmsioM  4: 

The  Illinois  Central  Railroad  Company,  a  carriw  by  railroad 
Bnbject  to  the  interstate  commerce  act,  hereinafter  referred  to  u 
the  applicant,  on  May  8,  1920,  made  application  to  the  Interatate 
Commerce  Commission  for  a  loan  from  the  United  States  in  ac- 
cordance with  section  210  of  the  transportation  act,  and  on  June 
18,  1920,  the  applicant  amended  and  anpplemented  the  application. 

The  aforesaid  amended  and  supplemental  application  was  made 
and  was  accompanied  fay  such  facts  as  the  Commission  required  and 
deemed  pertinent  to  the  inquiry,  in  accordance  with  paragraph  (a) 
of  section  210  of  the  transportation  act,  1920,  as  amended. 

In  response  to  the  aforesaid  amended  and  supplemental  applica- 
tion, the  Commission,  on  July  9,  1920,  by  its  certificate  No.  6,  to 
the  Secretary  of  the  Treasury,  certified  the  making  of  a  loan  to  tiie 
applicant  of  $4,511,700. 

The  applicant  on  August  24,  1920,  further  amended  the  aforesaid 
amended  and  supplemental  application. 

In  the  further  amended  application  of  August  24,  1920,  the  ap- 
plicant sets  forth: 

1.  That  the  amount  of  the  loan  now  desired  is  $4,440,000. 

S.  That  the  term  for  which  the  loan  is  desired  is  15  years. 

3.  That  the  purpose  of  the  loan  and  the  use  to  which  it  will  be  ap- 
plied are  to  pay  in  part  the  purchase  price  of  new  train  equipment. 

The  aforesaid  amended  application  of  August  24,  1920,  was  ac- 
companied by  such  facts  as  the  Commission  required  and  deemed 
pertinent  to  the  inquiry,  in  accordance  with  paragraph  (a)  of  sec- 
tion 210  of  the  transportation  act,  1920,  as  amended. 

,-  60i.|aa 


tour  xo  nuvoig  GnrntAi.  b.  b.  201 

After  utTcrfigitiop  uid  roeonsiderfttion,  the  Commision  fincts 
Ifaat  Iht)  making  of  a  loan  of  $4,440,000  b?  the  United  States  to  the 
applicant  for  the  aforesaid  purpose  is  oecessory  to  enable  the  ap- 
plicant properly  to  meet  the  transportation  needs  of  the  public- 
Hie  Commission  finds,  further,  that  the  prospectiTe  earning 
power  of  the  applicant,  and  the  character  and  value  of  the  Becurity 
offered,  afford  reasonable  assurance  of  the  applicant's  ability  to 
repay  the  loan  within  the  time  fixed  therefor  and  to  meet  its  other 
obligations  in  connection  with  such  loan,  and  reasonable  protection 
to  the  0nited  States;  and  that  the  applicant  is  unable  to  provide 
itself  from  other  sources  with  the  funds  necessary  for  the  aforesaid 
purposes. 

An  appropriate  certific&tf  will  be  issued,  and  certificate  Ko.  6, 
of  July  9, 1920,  will  be  canceled. 


Aviended  GerHfieate  IfO.  8fofa  Loanvnde^Seotton  610  of  the  Tran$- 
.    fortaAUn  Aei^  l^U}^  a»  Amended. 

The  Interstate  Commerce  Commissicai  further  certifies  to  tJie  Sec- 
ratary  of  the  Treasury  its  findings:  , 

1.  Iliat  the  making  of  a  loau  of  $4,440,000  by  the  United  States 
to  the  Illinois  Central  Railroad  Company,  hereinafter  referred  to  as 
the  applicant,  for  the  purpose  of  aiding  the  applicant  in  providing 
itself  with  additional  equipment,  is  necei^r;  to  enable  the  applicant 
pr(^>erly  to  meet  the  transportation  needs  of  the^  public. 

2.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  furnish 
leasMiable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor  and  to  meet  its  other  obligations  in 
connection  with  such  loan. 

5.  That  the  amount  of  the  loan  which  is  to  be  made  is  $4,440,000. 
4.  That  the  time  for  the  making  thereof  within  wt^ch  the  loan  shall 

be  repaid  in  full  is  15  years. 

6.  That  the  terms  and  conditions  of  the  loan;  including  the  smu- 
rity  to  be  given  for  repayment,  are : 

(a)  The  loan  should  be  repi^ahle  in  15  aqud  annual  installments 
of  $290,000  each,  maturing  consecutively  in  1  to  16  years  from  the 
date  thereof,  and  shall  be  secured  by  the  pledge  of  $5^14,000,  princi- 
pal amount,  of  applicaitf'a  refundingrmortgage  4  per  cei^  gold  bonds 
of  1955  in  the  following  amounts  and  denominations: 

6oi.aa 


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202  mT£BSIATB  COUUKKCa  OOlUasSIOK  BCFOBIB. 

H  boDds,  numbered  1jO0  to  102,  Indnrivfl^  In  dentHBlnnUon  of 

$100,000  each . 15,400, 000 

1  bond,  numbered  18S 10,000 

4,000 
Total 1 B,  414, 000 

(h)  The  applicant  may  pay  all  or  any  part  of  the  loan  before 
maturity.  The  collateral  security  shall  be  released  proportionately  as 
parts  of  the  loan  are  paid. 

(c)  That  the  applicant  shall,  on  demand  of  the  Secretary  of  the 
Treasury,  with  the  concurrence  of  the  Interstate  Commerce  Comnuft- 
sion,  deposit  with  the  Secretary  of  the  Treasury  such  additional 
security  as  may  be  from  time  to  time  required;  the  securities  pledged, 
together  with  any  that  may  be  pledged  hereafter,  or  may  have  beoi 
pledged  heretofore,  as  security  for  this  loan  or  any  other  obligation 
of  the  said  applicant  to  the  United  Statos,  for  loans  made  under  sec- 
tion  210  of  the  transportation  act,  1920,  shall  Tm  applicable  in  like 
manner  to  secure  the  payment  of  any  and  all  such  loans. 

(d)  The  applicant  has  agreed  in  an  instrument  in  writing,  dat«d 
the  29th  day  of  September,  1920,  filed  with  the  Interstate  Commerce 
Commission,  to  the  following  conditions:  That  the  amount  to  be 
financed  by  it  in  connection  with  the  loan  shall  be  so  financed  that 
the  cost  to  it  of  any  loans  secured  from  sources  other  than  the  United 
States  government  shaU  not  exceed  7\  per  cent  per  annum,  including 
in  such  cost  discounts,  attorneys'  fees,  and  any  and  all  other  expenses 
in  connection  therewith.  In  event  the  Commission  shall  certify  to  the 
Secretary  of  the  Treasury  that  the  applicant  haa  failed  or  refused 
well  and  truly  to  comply  with  any  one  or  more  <>f  the  terms  and  con- 
ditions contained  in  said  agreement,  the  whole  or  any  part  of  the 
obligations  evidencing  the  loan,  as  the  Commission  may  designate, 
shall,  at  the  option  of  the  holder,  become  due  and  payable. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  Uie  security  offered,  furnish,  in  the 
opinion  of  the  Conmiission,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor,  and  reason- 
able protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  itself  with  the  funds  necessary  for  the  aforesaid  purposes 
from  other  sources. 

Done  in  Washington,  D.  C,  this  8tfa  day  of  October,  19S0. 

eoi.G.a 


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LOAN  10  lount  dtirrBAL  &.  b.  £0S 


Finance  Docket  Ko.  986. 


Df  THE  MATTER  OF  THE  APPLICATION  OF  THE  MAINE 
CENTRAL  RAILROAD  COMPANY  FOR  A  LOAN  TO  PRO- 
VIDE EQUIPMENT  AND  OTHER  ADDITIONS  AND  BET- 
TERMENTS. 


eultmttted  Bept^mbwr  1,  IKO.    Decided  BtpttmHtw  tS,  19S0. 


ApplicatloD  granted  In  part  and  a  loan  of  $853,000  approved. 

Morria  McDonald  for  applicant. 

Refobt  of  thx  CoHMiaaioM. 
DinaiON  4,  CoHuisaioNEBB  Metbb,  Danlbls,  Eastman,  and  Pottbb. 
Bt  Ditibion  4 : 

The  Maine  Central  Railroad  Company,  a  carrier  by  railroad  eub- 
ject  to  the  interstate  commerce  act,  hereinafter  referred  to  as  the 
applicant,  on  May  S7, 1930,  made  application  to  the  Interstate  Com- 
merce Commission  for  a  loan  from  the  United  States  in  accordance 
with  section  210  of  the  tranaportation  act,  1920,  and  on  June  26, 
1920,  and  August  9, 1920,  said  applicant  amended  and  supplemented 
the  application. 

In  the  application,  as  amended  and  supplemented,  the  applicant 
sets  forth ; 

1.  That  the  amount  of  the  loan  desired  is  $1,530,000. 

2.  That  the  term  for  which  the  loan  is  desired  is  15  years. 

3.  That  the  purposes  of  the  loan  and  the  uses  to  which  it  will  be 
applied  are  to  enable  the  applicant  to  acquire  new  equipment  and  to 
make  additions  and  betterments,  as  follows : 

Pnrdkase  of  equipment  at  an  estimated  coat  of $780, 280 

Additlona  and  bettermeat — 

To  existing  equipment 265,900 

To  way  and  structnres 570,965 

Total 1, 667. 145 

4  Its  present  and  prospective  ability  to  repay  the  loan  and  meet 
the  requirements  of  its  obligations  in  that  regard. 

6.  That  the  security  offered  is  $1,800,000  par  value,  of  the  iq>pli- 
cant's  first  and  refunding  mortgage  6  p^r  cent  gold  bonds,  series  D, 
maturing  December  1,  1985. 

9.  niat  the  extent  to  which  the  public  convenience  and  necessity 
will  be  served  by  the  loan  is  as  follows:  The  applicant  is  a  carrier 
serving  established  industries  and  engaged  in  a  diversified  traffic 


204 


nrxEBSTAi*  cx>icuratoB  ooumssioN  abpobtb. 


of  importance  to  tiie  public;  the  acquisition  of  the  eqnipment  asked 
for  and  the  improvements  to  its  existing  equipment  and  way  and 
structures  will  enable  it  to  efficiently  handle  an  increasing  density 
of  traffic. 

The  application  was  accompanied  by  Buch  facts  in  detail  as  the 
Commission  required  with  respect  to  the  physical  situation,  owner- 
ship, capitalization,  indebtedness,  contract  obligations,  operation, 
and  earning  power  of  the  applicant,  together  with  such  other  facts 
relating  to  the  propriety  and  expediency  of  granting  the  loan  applied 
for  and  the  ability  of  the  applicant  to  mf^  good  the  obligation  as 
the  Commission  deemed  pertinent  to  the  inquiry. 

The  Association  of  Kailway  Executives  recommended  a  loan  to 
the  applicant  of  $866^62,  apportioned  as  follows: 

New  equipment: 

Purchase  of  freight-train  can - $68, 080 

Purchase  of  freight  and  awltcblng  locomotives 209.200 

Additions  and  betterments: 

To  existing  equipment 6B,900 

To  way  and  structures 683,  U2 

Total 886,202 

The  applicant  on  August  6, 1920,  amended  its  application,  increas- 
ing the  item  for  additions  and  betterments  to  existing  equipment  by 
the  additi(»i  of  an  item  of  110  rack  cars  to  be  rebuilt  at  a  eost  of 
$220,000. 

In  the  same  amendment  the  applicant  decreased  the  item  for  addi- 
tions and  betterments  to  way  and  structures  by  reducing  the  item  of 
rebuilding  Portland  Terminal  Company  shops  from  $&2,000  to 
$12,000.  These  items  are  not  included  in  the  recommendation  made 
by  the  Association  of  Kailway  Executives, 

After  investigation,  the  Commission  approves  ihn  making  of  a  loan 
for  die  following  purposes  and  in  approximately  the  following 
amounts: 


Poipc. 

EsUnuted 

ni»iH«i 

H^ 

EpUpmKH. 

"as 

HOB,  wo 

if.Ka 

1 

S34,T» 

m.tM 

«,»« 

JUUtoiu  mJ  MUmiMM  li>  BUtat  ifiilfmMitf. 

IE 

is 

ia 

RabuUdlmiiDrukew. , „ 

Taw _ _ 

m,m 

113,  ttO 

ia,<iie 

LOAN  TO   MAINE  CENTRAL  H.   B. 


rupoM. 

,^». 

"«»- 

s? 

BMdfltld  &  Wiltmllg  lipper  road,  CintoD  tmncb,  and  Fact- 

la 

S;S5 

0.800 

18,300 

19,340 
1T,IU0 

T8,M0 

12,070 
4,400 

^s 

afebufldJiua:  rabuiidlng  Portlanj  TwiiiW  Cmapaiir  "ahopi 

f^sss,Jfii^^si:'sP*^^fft 

•;mo 

l>,MO 

BKWwUtXdntrnuiUaMrpiRlvtr.Rttflluulbniiah 

1 

««,CT 

S49,1I8 

934,780 

4»a;j3J 

173,540 
249,118 

i,si«,gu 

»J,70» 

We  find  that  s  loan  of  $663,000  by  the  United  St&t«s  is  necessary  in 
order  to  wable  the  applicant  properly  to  meet  the  transportation 
needs  of  the  public;  that  the  prospective  earning  power  of  the  appli- 
cant, and  character  and  value  of  the  security  offered,  afford  assurance 
of  the  applicant's  ability  to  repay  the  loan  within  the  time  fixed 
therefor,  and  to  meet  its  other  obligations  in  connection  with  such 
loan,  and  reasonable  protection  to  the  United  States ;  and  that  the 
applicant  is  unable  to  provide  itself  with  funds  necessary  for  afore- 
said purposes  from  other  sources. 

An  appropriate  certificate  will  be  issued. 


Certificate  No.  £9  for  a  Loan  under  Section  SJO  of  the  Transportation 
■  Act,  19&),  at  Amended. 

The  Interstate  Commerce  Commission  certifies  to  the  Secretary 
of  the  Treasury  its  findings: 

1.  That  the  making  of  a  loan  of  $698,000  by  the  United  States  to 
the  Maine  Central  Railroad  Company,  hereinafter  referred  to  as 
the  applicant,  for  the  purpose  of  providing  it  with  equipment,  addi- 
tions and  betterments  to  existing  equipment,  and  additions  and 
betterments  to  way  and  structtires  to  promote  the  movement  of  cars, 
ja  necessary  to  enable  the  applicant  properly  to  meet  the  transporta- 
tion needs  of  &e  public. 
6SI.0.0: 


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206  INTEBSTATE  COMMERCE  COMMISSION  BEPOBTS. 

2.  That  the  prospectiTe  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  furnish 
reasonable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor,  and  to  meet  its  other  obligations  in 
connection  with  such  loan. 

3.  That  the  amount  of  the  loan  which  is  to  be  made  is  $653,000. 

4.  That  the  time  from  the  making  thereof,  within  which  the  loan 
shall  be  repaid,  is  19  years. 

a.  That  the  terms  and  conditions  of  the  loan,  including  the  security 
to  be  given  for  repayment,  are  as  follows ; 

(a)  The  loan  shall  mature  15  years  from  the  dat«  thereof,  and 
shall  be  collaterally  secured  by  the  pledge  of  the  applicant's  first  and 
refunding  mortgage  6  per  c«nt  gold  bonds,  series  D,  maturing  De- 
cember 1, 1935,  in  the  sum  of  $817,000.  The  bonds  are  of  the  denomi- 
nation of  $1,000,  and  are  numbered  16001  to  16817,  inclusive— 817 
bonds.  They  were  issued  under  the  first  and  refunding  mortgage, 
securing  20-year  gold  bonds  of  the  Maine  Central  Railroad  Company 
to  the  Union  Safe  Deposit  *  Trust  Company,  of  Portland,  Ma, 
trustee,  dated  December  1,  1913. 

(&)  Applicant  may  repay  any  part  or  all  of  the  loan  before  ma- 
turity. The  collateral  security  shall  be  released  proportionately  as 
parts  of  the  loan  are  paid. 

(c)  The  applicant  shall,  on  demand  of  the  Secretary  of  the 
Treasury,  with  the  concurrence  of  the  Interstate  Commerce  Conrniis- 
sion,  deposit  with  the  Secretary  of  the  Treasury  such  additional 
security  as  may  be  from  time  to  time  required ;  the  securities  pledged, 
together  with  any  that  may  be  pledged  hereafter,  or  may  have  been 
pledged  heretofore,  as  security  for  this  loan  or  any  other  obligation 
of  the  said  applicant  to  the  United  States,  for  loans  made  under  sec- 
tion 210  of  the  transportation  act,  1920,  as  amended,  shall  be  appli- 
cable in  like  manner  to  secure  the  payment  of  any  and  all  such  loans. 

{d)  The  applicant  has  agreed  in  an  instrument  in  writing  dated 
the  30th  day  of  September,  1920,  filed  with  the  Interstate  Commerce 
Commission,  to  the  following  conditions:  (1)  The  amount  to  be 
financed  by  the  applicant  in  connection  widt  the  loan  shall  be  so 
financed  that  the  cost  to  the  applicant  of  any  loans  secured  from 
sources  other  than  the  United  States  government  shall  not  exceed 
7  per  cent  per  annum,  including  in  sicfa  cost  discounts,  attorneys' 
fees,  and  any  and  all  other  expenses  in  connection  therewith. 
(2)  The  expenditures  made  from  the  loan  for  addititms  and  better- 
ments shall  be  confined  to  such  expenditures  as  may  be  chargeable 
to  accounts  for  investment  in  road  and  equipoMnt  provided  in  the 
Commission's  accoimting  classification  of  steam  roads  in  effect  at 
the  time  the  expenditures  may  be  made.     (8)  The  applicant  shall 

66  Lac. 


LOAK  TO  MAINE  CENTRAL  H.   R.  207 

furnish  the  Commission  on  or  about  January  1  and  July  1,  1920, 
the  detailed  certificates,  under  oath  of  its  chief  engineer,  showing 
the  character  and  costs  of  the  additions  and  betterments  made  with 
or  in  connection  with  this  loan  for  said  purposes.  The  loan  for  addi- 
tions and  betterments  shall  have  been  expended  or  definitely  obli- 
gated for  the  purposes  for  which  loaned,  or  repaid  to  the  United 
States,  on  or  before  July  1,  1921.  In  erent  the  Commission  shall 
ceitify  to  the  Secretary  of  the  Treasury  that  the  applicant  has  failed 
or  refused  well  and  truly  to  comply  with  any  one  or  more  of  the 
terms  and  conditions  contained  in  this  agreement,  the  whole  or  any 
part  of  the  obligation  evidencing  the  loan,  as  the  Commission  may 
designate,  shall,  at  the  option  of  the  holder,  become  due  and  payable. 

S.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish,  in 
the  opinion  of  the  Commission,  reasonable  assurance  of  the  appli- 
cant's ability  to  repay  the  loan  within  the  time  fixed  therefor,  and 
reasonable  protection  to  the  United  States. 

7.  That  ^e  applicant,  in  the  opinion  of  the  CommissioQ,  is  unable 
to  provide  itself  with  the  funds  necessary  for  the  aforesaid  purpose 
from  other  sources. 

Done  in  Washington,  D.  C,  this  9th  day  of  October,  1920. 

6SLaa 


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IHTEBSIATB  OOHMEECE  COHMISSION  BBPOBTS. 


Finance  Docket  No.  1034. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  VIK- 
GINIAN  RAILWAY  COMPANY  FOE  A  LOAN  FROM  THE 
UNITED  STATES  TO  AID  IN  PROVIDING  NEW  EQUIP- 
MENT  AND  ADDITIONS  AND  BETTERMENTS. 


Eubmtttea  Beptembw  tS,  19t0.    Decided 'September  tS,  I9t0. 


Application  granted  and  a.  loan  of  $2,000,000  approved. 
C  TV.  Hxtntington  for  applicant. 

RxFCttT  OF  TBS  GoMKiaSION, 

Division  4,  Cohhisbionkrs  Meter,  Danieu,  Easthan,  and  Pottes. 
Br  Division  4 : 

The  Virginian  Railway  Company,  a  carrier  by  railroad  subject 
to  the  interstate  commerce  act,  hereinafter  referred  to  as  the  appli- 
cant, on  July  21,  1920,  made  application  to  the  Interstate  Commerce 
Commission  for  a  loan  from  the  United  States  in  accordance  with 
section  210  of  the  transportation  act,  1920,  as  amended. 

In  said  application  the  applicant  sets  forth : 

1.  That  the  amount  of  the  loan  desired  is  $2,000,000. 

2.  That  the  term  for  which  the  loan  is  desired  is  five  years. 

3.  That  the  purposes  of  the  loan  and  the  uses  to  which  it  will  be 
applied  are  to  aid  the  applicant  in  providing  itself  with  new  equip- 
ment and  additions  and  betterments  to  existing  equipment  and  way 
and  structures,  as  follows: 

Bqalptnent : 

10  Mallet  locomotives 1744,721 

Additions  and  betterments: 

Widening  cuts  and  OIU,  et« 49,638 

BaUastlng 200,000 

Rails  and  other  track  material 884,805 

Bridges,  trestles,  and  culverts 61,772 

Grade  crosalngs  and  crossing  signals 297 

Additional  main  trade .  888^  006 

Additional  yard  tracks,  sidings  and  Indastry  tracks S00.S88 

Signals  and  Interlocking  plants ST,6S6 

Tetegrapb  and  tel^boQe  lines 28, 724 

Section  houses  and  other  railway  bnlldlngs 24,828 

Fences,  anowsheds,  etc 16,000 

B'relght  and  passenger  statlMis SB,  SCO 

Fael  stations  and  aivnrtaniuKM 17,060 

oai.aa 


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LOAN  TO  TTBGIiriAK  BT.  309 

AddlUona  and  bottermrats— OoDtlntiad. 

Water statloDB  and  appurtMiaiiceB 184,861 

Sbop  bnlldlnCB,  engloebouRea,  etc 286,508 

Shop  macUDfliT  and  toola , 158,200 

Electric  power  plant,  sabstatlons,  and  tnnsmlsilon  and  dla- 

tributlon  lluea C  451 

Wharves  and  docks 6,800 

Work  equlpmeot 94,846 

ImprovementB  to  erlatinK  eqnipment 9S,  lit 

Conatructton  of  extenaloo  and  brandies 108,08} 

Total  capital  expeodltores 2,923,873 

Chaises  to  operatlOD , 700,020 

Total  coat  of  wt^  indwUnc  charges  to  operation 8,628,802 

Orand  total,  excludlnc  charges  to  operation 3,668,093 

4.  The  present  and  prospective  ability  of  the  applicant  to  repay  the 
loan  and,  to  meet  the  obligations  in  regard  thereto. 

5.  That  the  security  offered  is  the  applicant's  first  and  only  mort- 
gage gold  bonds,  to  be  pledged  in  amoonts  necessary  to  secure  the 
loan. 

6.  That  with  its  present  equipment  the  applicant  is  unable  to  meet 
tbe  demands  on  it  for  freight  transportation;  that  applicant  is  a 
lai^  and  almost  ezclusiTe  carrier  of  bitmntnoua  coal,  the  mines  on  its 
line  having  a  present  capacity  of  over  14,000,000  tons  per  annnmj 
and  that  the  public  convenience  and  necessity  will  be  served  by  the 
supplying  of  the  aforesaid  additions  and  betterments  to  aid  applicant 
in  extending  its  facilities  to  increase  the  movement  of  coal  and  other 
traffic  now  offered  it  in  excess  of  its  ability  to  transport  The  com- 
pletion of  double-trackinfr  of  its  ruling  grade  over  Clark's  Gap 
Mountain  is  a  notable  item. 

The  application  was  accompanied  by  such  facts  and  details  as  the 
Commission  required  with  respect  to  the  physical  situation,  owner- 
ship, capitalization,  indebtedness,  contract  obligations,  operation, 
and  earning  power  of  the  applicant,  together  with  such  other  facts 
relating  to  the  propriety  nnd  expediency  of  granting  the  loan  applied 
for  and  the  ability  of  the  applicant  to  make  good  the  obligation,  as 
the  Commission  deemed  pertinent  to  the  inquiry. 

The  Association  of  Railway  Executives  recommended  a  loan  to  the 
applicant  of  $2,000,000  for  completion  of  double  track  on  ruling 
grade. 

The  following  items  have  been  eliminated  from  the  application  as 
not  tending  directly  to  promote  the  movement  of  freight-train  cars : 

Cnas  1,  Item  D,  alopLog  Devil's  cut $16,000 

Qaaa  3,  Item  D,  street  crossing,  Roanoke,  Va 2, 100 

Class  4,  Item  C,  Victoria,  Va.,  overhead  highway  bridge .         010 

fl«S44*— 22— v<a,  66 14 


Google 


210  mTEBSTATB  GOHMBSCE  COHMlSSION  BSPOKTB. 

OlasB  8,  NarrowH,  Vs.,  new  eonntr  road  cnalag SSWT 

ClaaS  IB,  Mction  booaea  and  other  roadway  bnlldlDgs 24,  ftSB 

Claaa  17,  freieht  and  passenger  stations CO.  85d 

OUaa  *S,  application  of  electric  classlflcatloD  lamps  to  locoiDotlves S,  268 

Glass  48,  steam  heat  for  baggage  cars 587 


After  iDTestigation,  th«  Commismon  finds  that  the  making  of  Uie 
propoeed  loan  of  $2,000,000  for  the  foUowing  purpoies— 


Piin»Mi. 

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Nnr     nhimvit  IOIMIbII        oti 

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Addltloiia  ud  b<et«rm«nt9  to  prm^  tha  mommnt  ot  Mfbt- 

a,m,m 

»i,»n.uB 

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by  the  United  States  is  nece&sarj  in  order  to  enable  the  applicant 
properly  to  meet  the  transportation  needs  of  the  public;  that  the 
prospective  earning  power  of  the  applicant  and  character  and  value 
of  the  security  offered  afford  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor  and  to  meet 
its  other  obligations  in  connection  with  such  loan,  and  reasonable 
protection  to  the  United  States;  and  that  the  applicant  is  unable  to 
provide  itself  with  funds  necessary  for  aforesaid  purposes  from  other 
sources. 
.  An  appropriate  certificate  will  be  issued. 


O^rtificate  No.  SI  for  a  Loan  under  Section  910  of  th*  Tranaportation 
Act,  J9£0,  as  Amended. 

The  Interstate  Commerce  Commission  certifies  to  the  Secretary  of 
the  Treasury  its  findings : 

1,  That  the  making  of  a  loan  of  $2,000,000  by  the  United  Statea 
to  the  Virginian  Railway  Company,  hereinafter  referred  to  as  the 
applicant,  for  the  purpose  of  aiding  applicant  to  acquire  freight 
locomotives  and  to  make  additions  and  betterments  to  roadway  and 
structures  to  promote  the  movement  of  freight-train  cars,  is  neces- 
sary to  enable  the  applicant  properly  to  meet  the  transportation  needs 
of  the  public. 

8.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  furnish 
reasonable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor  and  to  meet  its  other  obligations  in 
connection  with  such  loan. 

66I.G.C 


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LOAN  TO  VIRGINIAN  BY.  311 

8.  That  the  amount  of  the  loan  which  is  to  bo  made  is  $2,000,000. 

4.  That  the  time  from  the  making  thereof,  within  which  the  loan 
is  to  be  repaid  in  full,  is  five  years. 

fi.  That  the  terms  and  conditions  of  the  loan,  including  the  securi^ 
to  be  given  for  repayment,  are : 

(a)  The  loan  shall  be  made  in  two  installments  of  $1,000,000  each. 
The  first  installment  shall  mature  live  years  from  the  making  thereof, 
and  shall  be  collaterally  secured  by  the  pledge  of  $1,800,000  of  appli- 
cant's first-mortgage  5  per  cent  50-year  series-A  gold  bonds,  due 
1962,  issued  under  an  indenture  dated  May  1,  1912,  executed  by  the 
applicant  to  the  Fanners'  Loan  ft  Trust  Company,  New  York,  trus- 
tee. The  bonds  are  of  the  denomination  of  $1,000,  and  are  num- 
b«'ed  M-31870  to  M-^8169,  inclusive,  having  coupons  due  November 
1,  1920,  and  subsequent  coupons  attached.  The  second  installment 
shall  mature  five  years  from  the  making  thereof,  and  shall  be  col- 
laterally-secured by  the  pledge  of  $1,500,000  of  applicant's  first- 
mortgage  6  per  cent  60-year  series-A  gold  bonds,  due  1962,  issued 
under  an  indenture  dated  May  1,  1912,  executed  by  the  applicant  to 
the  Farmers'  Loan  ft  Trust  Company,  New  Yc^k,  trustee.  The 
bonds  are  of  the  denomination  of  $1,000  each,  and  are  numbered 
M-33170  to  M-34e69,  incliisive,  having  coupons  due  November  1, 
1920,  and  subsequent  coupons  attached. 

(J)  The  applicant  may  pay  all  or  any  part  of  the  loan  before 
maturity.  The  collateral  security  shall  be  released  proportionately 
as  parte  of  the  loan  are  paid. 

{e)  The  applicant  shall,  on  demand  of  the  Secretary  of  the  Treas- 
ury, with  the  concurrence  of  the  Interstate  Commerce  Commission, 
deposit  with  the  Secretary  of  the  Treasury  such  additional  security 
as  may  be  from  time  to  time  required ;  the  securities  pledged,  to- 
gether with  any  that  may  be  pledged  hereafter,  or  may  have  been 
pledged  heretotore,  as  security  for  this  loan  or  any  other  obligation 
of  the  said  applicant  to  the  United  States  for  loans  made  under  sec- 
tion 210  of  the  transportation  act,  1920,  as  amended,  shall  be  ap- 
plicable in  like  manner  to  secure  the  payment  of  any  and  all  such 
loans. 

{d)  The  applicant  has  agreed  in  an  instrument  in  writing,  dated 
the  30th  day  of  September,  1920,  filed  with  the  Interstate  Commerce 
Commission,  to  the  following  conditions:  (1)  That  the  amount  to 
be  financed  by  it  in  connection  with  the  loan  shall  be  so  financed  that 
the  cost  to  it  of  any  loans  secured  from  sources  other  than  the 
United  States  government  shall  not  exceed  7  per  cent  per  annum,  in- 
cluding in  such  cost  discounts,  attorney's  fees,  and  any  and  all  other 
expenses  in  connection  therewith.  (2)  The  expenditures  made  from 
the  loan  for  additions  and  betterments  shall  be  c<Hifined  to  such-e^- 
«1I.0.0.  ^,^,g|^. 


212  UTTESSTATB  OOMHBBOB  OOHHIBSIOH  BBPOEtS. 

penditures  as  may  be  chargeable  to  accounts  for  investment  in  road 
and  equipment  provided  in  the  Commission's  accounting  classifica- 
tion for  steam  roads  in  effect  at  the  time  the  expenditures  may  be 
made.  (3)  The  applicant  shall  furnish  the  Commission  on  Jan- 
uary 1  and  July  1,  1921,  detailed  certificates,  under  oath  of  its  chi«f 
engineer,  of  the  additions  and  betterments  made  with  or  in  connec- 
tion with  the  loan  for  said  purposes.  The  loan  for  additions  and 
betterments  shall  have  bean  expended  or  definitely  obligated  for  the 
purposes  for  which  loaned,  or  repaid  to  the  United  States,  on  or 
before  July  1,  1921.  In  event  the  Commission  shall  certify  to  the 
Secretary  of  the  Treasury  that  the  applicant  has  failed  or  refused 
well  and  truly  to  comply  with  any  one  or  more  of  the  terms  and 
conditions  contained  in  said  agreement,  the  whole  or  any  part  of  tiie 
obligations  evidencing  the  loan,  as  the  Commission  may  designate, 
shall,  at  the  option  of  the  holder,  become  due  and  payable. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish,  in  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor,  and  reason- 
able protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  itself  from  other  sources  with  the  funds  necessary  for 
the  aforesaid  purposes. 

Done  at  Washington,  D.  C,  this  8th  day  of  October,  1020. 

86  Laa 


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BONDB  OF  BOSTON  A  UAUSm  B.  B. 


Finance  Docket  Kg.  48. 
IN    THE    MATTER    OF    THE    APPLICATION    OF    THE 
BOSTON  A  MAINE  RAILROAD  FOR  AUTHORITY  TO 
ISSUE  MORTGAGE  BONDS. 


Sutmtitted  September  SS,  19i0.    Deddei  September  i8,  19t0, 


Authority  granted  for  the  laaue  of  $3,843,000  of  6  per  ceat  bonds  under  k 
certain  mortgage  dated  December  1,  1919,  for  tbe  purpose  of  refunding 
certain  booda  and  notes. 

Woodward  Hudson  for  applicant. 

Report  and  Ohder  of  the  CoHiiiseiON. 
DivmoK  4,  CouHiseioNBBS  Meter,  Danieu,  Eavthan,  and  Pottbb. 
Bt  Division  4: 

It  appearing.  That  the  Boston  &  Maine  Railroad,  a  comm<»i  car- 
rier hy  railroad  engaged  in  interstate  commerce,  has  made  applica- 
tion to  this  Commission  under  section  20a  of  the  interstate  com- 
merce act  for  authority  to  issue  $3,843,000  of  bonds  under  a  certain 
mortgage,  said  bonds,  or  the  proceeds  thereof,  to  be  used  to  purchase, 
pay,  retire,  or  refund  an  equal  amount  of  bonds  and  notes,  being 
the  remainder  of  bonds  and  notes  in  the  aggregate  principal  amount 
of  $8,843,000,  specified  below,  after  applying  to  the  refunding  of  the 
same  the  amount  of  $5,000,000  loaned  to  the  applicant  by  the  United 
States,  under  section  210  of  the  transportation  act,  1920,  as  amended, 
pursuant  to  certificate  No.  1  of  the  Commission  dated  May  21,  1920 : 
4  per  cent  mortgage  bonds  of  tbe  Concord  k  Montreal  Railroad 

maturing  June  1.  1820 J6, 500, 000 

4  per  cent  bonds  of  the  Concord  ft  Montreal  Railroad  maturing 

June  1,  1920 640,000 

8)  per  cent  bonda  of  the  Concord.  &  Montreal  Railroad  maturing 

June  1,  1920 873, 000 

B  per  cent  bonda  of  the  Concord  ft  Hontreal  Railroad  maturing 

June  1,  1920 300,000 

4  per  cent  bonds  of  tbe  Pitcbburg  Railroad  Company  maturing 

June  1,  1820 500.000 

6  per  cent  and  61  per  cent  notea  of  the  Boston  ft  Lowell  Railroad 

Corporation  metnrlng  July  1,  1920 620,000 


8,843,000 


It  further  appearing.  That  said  application  was  made  in  such  form 
and  contained  such  matters  as  the  Commission  prescribed,  and  that  it 
was  made  under  oath,  signed,  and  filed  on  behalf  of  said  carrier  by 

06 1,  c,  a 


ogle 


214  INTEBSTATB  OOUUSROB  COHMISSION  BSFO&TI. 

one  of  its  executive  officers  having  knowledj^  of  the  nutters  theran 
set  forth  and  duly  deeiguated  for  th&t  purpose  by  the  carrier ;  and 

It  further  appearing,  That  notice  of  the  filing  of  said  application- 
has  been  given  to,  and  a  copy  thereof  filed  with,  the  governor  of 
each  of  the  states  of  Massachusetts,  New  Hampshire,  Maine,  New 
York,  and  Vermont,  the  only  states  in  which  said  carrier  operates, 
and  that  no  objection  to  the  issuance  by  this  Commission  of  an  order 
granting  the  application  has  been  offered  by  the  railroad  commission 
or  other  appropriate  authority  of  any  of  said  states;  and 

It  further  appearing,  That  full  investigation  of  the  matters  and 
things  involved  in  this  proceeding  has  been  had; 

Held,  That  the  proposed  issue  by  the  Boston  &  Maine  Railroad 
(a)  is  for  a  lawful  object  within  its  corporate  purposes,  and  com- 
patible with  the  public  interest,  which  is  necessary  and  appropriate 
for  and  consistent  with  the  proper  performance  by  it  of  service  to 
the  public  as  a  common  carrier,  and  which  will  not  impair  its 
ability  to  perform  that  service;  and  (&)  is  reasonably  necessary  and 
appropriate  for  such  purpose. 

It  is  therefore  ordered.  That  the  Boston  &  Maine  Railroad  be,  and 
it  hereby  is,  authorized  to  issue,  as  of  the  date  of  June  1,  1920, 
$3,643,000  of  bonds  to  be  designated  as  series  F;  said  bonds  to  be 
issued  under  and  pursuant  to,  and  secured  by,  the  mortgage  dated 
December  1,  1919,  made  by  said  Boston  &  Maine  Railroad  to  the 
Old  Colony  Trust  Company  and  S.  Parkman  Shaw ;  said  bonds  to 
be  redeemable  and  to  be  registrable  as  provided  in  the  mortgage, 
and  to  be  in  the  forms  submitted  with  the  application,  to  bear 
interest  at  the  rate  of  6  per  cent  per  annum,  payable  semiannually, 
on  the  1st  day  of  June  and  the  Ist  day  of  December  of  each  yeari' 
and  the  principal  thereof  to  be  payable  June  1,  1930;  such  bonds 
to  be  sold  and  disposed  of  at  par,  and  said  bonds,  or  the  proceeds 
thereof,  to  be  used  solely  for  the  purpose  of  purchasing,  paying, 
retiring,  or  refunding  $3,843,000  of  the  hereinbefore-described  bonds, 
maturing  on  June  1,  July  1,  and  October  1,  1930. 

It  it  further  ordered,  That  said  applicant  shall  furnish  to  this 
Commission  periodical  statements  showing  all  pertinent  facts  in 
connection  with  the  issue  of  said  $3,843,000  of  series-F.  bonds,  and 
the  use  of  these  bonds,  or  the  proceeds  thereof,  for  the  purposes 
lierein  authorized,  the  first  statement  to  be  made  60  days  after  the 
date  of  this  order,  and  subsequent  statements  to  be  made  every  60 
days  thereafter  until  all  of  said  bonds  shall  have  been  issued  and 
used,  or  the  proceeds  thereof  used. 

And  it  M  further  ordered,  That  nothing  herein  shall  be  construed 
to  imply  any  guaranty  or  obligation  as  to  said  series-F  bonds,  or 
interest  thereon,  on  ths  part  of  Uu  United  States. 

OBLaa 

rK:,iz...,C00gIc 


SOTES  OF  BIOHICOHD,  TBEDBBIOKSBTTBe  A  POTOMAO  B.  B.     filS 


Finance  Dookbt  No.  67. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  RICH- 
MOND, FREDERICKSBURG  &  POTOMAC  RAILROAD 
COMPANY  FOR  AUTHORITY  TO  INDORSE  AND  NEGO- 
TIATE NOTES  OF  THE  RICHMOND  TERMINAL  RAIL- 
WAY COMPANY. 


SmUnUUeS  S«9te«6«r  18,  IStO.    Decided  September  1 


Authority  Kranted  to  Indorse  and  negotiate  on  a  6  per  cent  baala  S2SO,000  of 
6  per  cent  dMaaod  notM  of  tb«  Richmond  Terminal  Ralhraj  Company. 

Epfa  Bunion,  jr.,  for  applicant. 

Repast  and  Ordeb  of  ths  Couuission. 
DmaioN  4,  Coumusionkxs  Metir,  DASiELa,  Eabtkan,  and  Potter. 
Bt  Division  4 : 

/(  appearing.  That  the  Richmond,  Fredericksburg  A  Potomac  Rail- 
road Company,  a  common  carrier  by  railroad  engaged  in  interstate 
commerce,  has  made  application  to  this  Commission  under  section 
20a  of  the  interstate  commerce  act  to  indorse  and  negotiate  on  a 
6  per  cent  basis  not  to  exceed  $250,000  of  the  6  per  cent  demand  notes 
of  the  Richmond  Terminal  Railway  Company,  owned  by  the  appli- 
cant company  and  held  in  its  treasury,  the  proceeds  to  be  used  for 
payment  in  part  of  back  pay  due  employees  under  the  award  of  the 
Railroad  Labor  Board,  the  total  of  which  payments  it  is  estimated' 
will  amount  to  $330,000;  and 

It  further  appearing,  That  said  application  was  made  in  such  form 
and  contained  such  matters  as  the  Commission  prescribed,  and  that 
it  was  made  under  oath,  signed,  and  filed  on  behalf  of  the  applicant  by 
one  of  its  executive  officers  having  knowledge  of  the  matters  therein 
set  forth  and  duly  designated  for  that  purpose  by  the  applicant;  and 

It  further  appearing,  That  notice  of  the  filing  of  the  application 
has  been  given  to,  and  a  copy  thereof  filed  with,  the  governor  of  the 
state  of  Virginia,  the  only  state  in  which  the  applicant  operates,  and 
that  no  objection  to  the  issue  by  this  Commission  of  an  order  granting 
the  application  has  been  offered  by  the  State  Corporation  Commis- 
sion or  other  authority  of  said  state ;  and 

It  further  appearing,  That  full  investigation  of  the  matters  and 
things  involved  in  this  proceeding  has  been  had : 

Seld,  That  the  proposed  indorsement  and  negotiation  of  the  6  per 
cent  demand  note*  of  tha  Richmond  Terminal  Railway  Compa4y 


ogle 


216  nrCBBSIATB  oommbbcoe  oiuhission  kbposib. 

by  the  Applicant  (a)  are  for  a  lawful  object  witliia  the  corporate 
purposes  of  the  applicant,  and  compatible  with  the  public  interest, 
which  is  necessary  and  appropriate  for  and  consistent  with  the 
proper  performance  by  it  of  service  to  the  public  as  a  common 
carrier,  and  which  will  not  impair  ita  abilify  to  perform  that 
Krvice;  and  (&)  ar«  reasonably  necessary  and  appropriate  for  such 
purpose. 

Eeld  fwthsr,  That  the  obligation  to  be  created  by  the  proposed 
indorsement  and  negotiation  of  sud  demand  notes,  tc^ther  with 
all  other  outstanding  notes  of  the  a^^Ucant  of  a  maturity  of  two 
years  or  less,  will  aggregate  more  than  6  per  cent  of  the  par  value 
of  the  securities  of  the  Richmond,  Fredericksburg  &  Potomac  Rail- 
road Company  outstanding  at  the  date  of  said  application. 

It  u  therefore  orderad.  That  the  Richmond,  Fredsricksbui^  & 
Potomac  Railroad  Company  be,  and  it  is  hereby,  authorized  to  in- 
dorse demand  notes  of  the  Richmond  Terminal  Railway  Company 
in  an  aggregate  principal  amount  not  to  exceed  $250,000,  and  to 
Dgegotiate  the  not^  so  indorsed  on  a  basis  of  interest  at  the  rate  of 
6  per  cent  per  annum,  the  proceeds  arinng  therefrom  to  be  itsed 
solely  for  the  purpose  of  paying  in  part  the  obligations  of  the 
applicant  to  its  employees,  as  set  forth  in  said  application. 

It  is  further  ordered,  That  the  applicant  shall  make  a  report  to 
the  Commission  of  the  indorsing  and  negotiating  of  said  demand 
notes  within  10  days  after  the  same  shall  have  beem  so  indorsed  and 
negotiated;  and  that  said  applicant  shall  thereafter  make  reports 
to  this  Commission,  at  the  end  of  each  60  days,  of  the  redemption 
or  taking  up  of  such  notes  until  such  time  as  all  of  said  notes  shall 
h^e  been  redeemed  or  taken  up. 

And  it  is  further  ordered,  That  nothing  herein  shall  be  construed 
to  imply  any  gaaranty  or  obligation  on  the  part  of  Uie  United 
States  as  to  the  payment  of  the  principal  or  Interest  of  any  of  said 
demand  notes  of  the  Richmond  Terminal  Railway  Company  so 
indorsed  and  negotiated. 

«6i.  aa 


D,=;,lz...,C00gIC 


LOAN  TO  WHEEUNO  *  LAKE  BAIE  RT. 


FmANCE  Docket  No.  1038. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  WHEEI/- 
ING  &  LAKE  ERIE  RAILWAY  COMPANY  FOR  A  LOAN 
FROM  THE  UNITED  STATES  TO  MEET  MATURING 
INDEBTEDNESS  AND  FOR  OTHER  PURPOSES. 


finbmitMd  September  n,  19tO.    Dtd&ed  September  S9,  19t0. 


AppUcatton  cnnted  In  part  and  loaoa  of  $1,460,000  for  addittons  and  better- 
ments and  $1,000,000  for  matnrltleB  approvad. 

W.  Af.  Dunctm,  Andrmo  P.  Martin,  and  Sgmre,  Sanders  t6  Demp- 
gey  for  applicant. 

Report  of  the  Commibsion, 
Division  4,  Couhissionebs  Metzb,  Daniels,  Ea^han,  and  Fottek. 
Bt  Division  4; 

The  Wheeling  &  Lake  Erie  Railiray  Company,  a  carrier  by  rail- 
road subject  to  the  interstate  commeroe  act,  hereinafter  referred  to 
as  the  applicant,  on  Jane  19,  1020,  made  application  to  the  Inter- 
state Conmierce  Commission  for  a  loan  from  the  United  States  in 
accordance  with  section  210  of  the  transportation  act,  1930,  as 
amended,  and  on  Augast  17  and  September  15,  1920,  said  applicant 
amended  and  supplemented  its  application  pursuant  to  the  Com- 
mission's announcement  of  June  7,  1920,  of  the  general  principles 
by  which  it  would  be  govwned  in  administering  the  fund  created  by 
said  section  of  the  act. 

In  the  application,  as  amended  and  supplemented,  the  applicant 
sets  forth: 

L  That  the  amount  of  the  loan  desired  is  $12,912,340. 

Q.  That  the  term  for  which  the  loan  is  desired  is  15  years. 

8.  That  the  purpose  of  the  loan  is  as  follows : 
For  new  freight-train  equipment-. 


For  addttlona  and  betterments  to  roadway  and  8tructure« 1, 461,  S40 

For  maturities,  1920  ($1341,000) 1     «  .^  ay. 

For  maturities,  1821  ($1,108,800) (     "   ^'"^^ 


Total 12, 912, 840 

4.  That  the  uses  to  which  the  loan  will  be  applied  are — 
Pnrchase  of  fretgbt-traln  equipment: 

2,000  flfty-ton  steel  gondola  ears,  1,000  forty-ton  ateel-onder- 
frame  box  cars,  at  average  estimated  cost  of  $3fiO0  each  or 
total  estimated  coet  of $9,000,000 

esLaa 


1,35a  am 


218  INTEBSTA.TE  OOimBBOB  OOlfldSSION   BBPOBTB. 

Additions  ud  bettermeDtai  to  expedite  movement  of  frelgbt-tntln 

Addltlona!  jBui,  tracks  and  etiKlne  terminal  at  Oanton,  Ohio—        fBTS,  SiD 

Tatd  and  engine  terminal  at  Jewett,  Ohio 486,  SOO 

Oar-repaIr  shop.  Tard,  transfer  table,  etc^  at  Brewster,  Ohlo_  401,800 

Total  addltlona  and  betterments 1,401,540 

HeetlOK  mataritlea: 

Equipment  mataritlea  due  1B20  ($241,000) 

Equipment  maturltleB  due  1B2I  ($1,109,800) 

Bank  loans  due  In  December,  1920 .'      1, 100, 000 

Total    raatnriUea 2,460,800 

5.  That  its  present  and  prospective  ability  to  repay  the  loui  and 
meet  the  requirementa  of  its  obligations  in  that  respect  are  that  the 
increase  in  earnings  and  the  decrease  in  operating  charges,  including 
saving  in  per  diem,  will  be  sufficient  to  more  than  meet  the  interest 
and  the  amortization  of  the  cost  of  the  equipment,  over  a  15-year 
period,  as  well  as  to  repay  in  that  period  the  amounts  applied  for 
on  account  of  additions  and  betterments  and  maturities. 

6.  That  the  security  offered  is  applicant's  refunding-mortgage  0 
and  6  per  cent  bonds,  due  September  X,  1&66. 

7.  That  the  extent  to  which  tiie  public  Convenience  and  necessity 
will  be  served  by  the  loan  is  indicated  by  statements  of  applicant 
that  the  loan  will  enable  it  to  provide  necessary  additicms  and  bet- 
terments to  roadway  and  structures  to  expedite  Uie  movement  of  cars 
and  trains;  to  purchase  2^000  steel  gondola  cars  and  1,000  new  steel- 
underfrome  box  cars,  required  to  meet  the  demands  of  shippers; 
also  to  meet  obligations  now  outstanding  which  mature  during  the 
years  1920  and  1921  that  applicant  is  unable  to  finance  through  any 
other  source. 

Said  application  was  accompanied  by  such  facts  and  details  as 
the  Commission  required  with  respect  to  the  physical  sitnatiMi, 
ownership,  capitalization,  indebtedness,  contract  obligations,  opera* 
tion,  and  earning  power  of  the  applicant,  with  such  other  facts  re- 
lating to  the  propriety  and  expedient^  of  granting  the  loan  applied 
for  and  the  ability  of  the  applicant  to  make  good  the  obligation  as 
the  Commission  deemed  pertinent  to  the  inquiry. 

The  Association  of  Railway  Executives  recommended  the  making 
of  a  loan  to  the  applicant  of  $1,491,540  to  enable  it  to  make  additions 
and  betterments  to  way  and  structures,  consisting  of  additional 
freight  yards,  engine  terminals,  and  repair  shops. 

eoi.ca 


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LOAK  TO  WHEKLIHO  *  UEB  SUE  BT.  219 

Upm  ibe  request  of  A.  P.  Martin,  aaaJBtant  general  attorney  of  th« 
applicant,  dated  September  17,  X930,  Hm  applicaticais  for  amounts  to 
be  expended  for  new  equipment  and  for  additions  and  bettermente  to 
roadway  and  stmcturea  will  be  con^dered  separately. 

After  investigation,  the  Commission  finds  ihat  the  making  of  loans 
by  the  United  States  to  the  applicant  of  $1,460,000  for  additions  and 
betterments  and  $1^000,000  for  matur^iee,  covering  approximately 
the  following  schedules,  are  necessary  in  order  to  enable  the  applicant 
properly  to  meet  the  transportation  needs  of  the  public;  that  the 
prospective  earning  power  of  the  applicant  and  character  and  value 
of  the  security  offered  afford  reasonable  assurance  of  the  applicant's 
ability  to  repay  tbe  loans  within  the  time  fixed  therefor,  and  to  meet 
its  other  obligations  in  connection  with  such  loans,  and  reasonable 
protection  to  the  United  States;  and  that  the  applicant  is  unable  to 
provide  itself  from  other  sources  with  funds  necessary  for  said  pur- 
poses. 

For  addtUona  and  betterments ; 
Additional  yard,  tracks,  and  engine  termbiKl  at  OantOD,  Ohlo__    (678. 380 

Tarda  aud  engine  t«nnlnal  at  Jewett,  Oblo 480,800 

Car-repair  shop,  fard,  tratutfer  table,  etc  at  Btewater,  Oblo 401,860 

Total 1, 461.  HO 

For  matnrltles; 

Cltliena  SavinEB  ft  Tnist  Company,  maturing  Dec  30,  l&ZO 800, 000 

Goardian  Savings  ft  Trust  Company,  maturing  Dec.  24, 1020 1,300,000 

UdIod  Commerce  National  Bank,  matariug  Dec.  24, 1920 100, 000 

Total  maturities 2,200.000 

To  be  flnanced  by  applicant 1, 200, 000 

Loan  by  Onlted  States 1,000,000 

Appropriate  certificates  will  be  issued. 


Certificate  No.  94  for  a  Loan  under  Section  £10  of  the  Transporta- 
tion Act,  19i0,  at  Amended. 

The  Interstate  Commerce  Commission  certifies  to  the  Secretary  of 
the  Treasury  its  findings: 

1.  That  the  making  of  a  loan  of  $1,460,000  by  the  United  States 
to  the  Wheeling  &  Lake  Erie  Railway  Company,  hereinafter  re- 
ferred to  as  the  applicant,  for  the  purpose  of  enabling  it  to  make 
additions  and  bettwmenta  to  roadway  and  structures,  is  necessary 
to  enable  the  applicant  properly  to  meet  the  transportation  needs  of 
the  public. 

2.  That  the  prospective  earning  power  of  (he  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  furnish 


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220  INIGBSTAIB  COMUEBOB  OOHSOSSION  &EPOBXB. 

reasonable  tussurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefOT,  and  to  meet  ita  other  obligations  in 
connection  witii  such  loan. 
8.  That  the  amount  of  the  loan  which  is  to  be  made  is  $1,460,000. 

4.  That  the  time  from  the  making  thereof,  within  which  the  loan 
is  to  be  repaid  in  full,  is  10  years. 

5.  That  the  terms  and  conditions  of  the  loan,  including  the  security 
to  be  given  for  repayment,  are: 

(a)  The  loan  shall  be  made  in  installments  as  follows; 

First  installment *400,000 

Second  Itutallment 400, 000 

Third  InBtaUuient 400,000 

Foarth  InBtailment 280,000 

Total 1,460,000 

(i)  The  entire  loan  shall  be  collaterally  secured  as  follows: 
(1)  Upon  the  making  of  the  first  installment,  $400,000,  by  the  pledge 
of  applicant's  refunding-mortgage  5  per  cent  bonds,  series  B,  of  the 
par  value  of  $S00,000;  (2)  upon  the  making  of  the  second  install- 
ment, $400,000,  by  the  further  pledge  of  applicant's  refunding-mort-  ~ 
gage  5  per  cent  bonds,  series  B,  of  the  par  value  of  $400,000;  and 
by  the  further  pledge  of  applicant's  refunding-mortgage  6  per  cent 
bonds,  series  C,  of  the  par  value  of  $400,000 ;  (3)  upon  the  making 
of  the  third  installment,  $400,000,  by  the  further  pledge  of  appli- 
cant's refunding-mortgage  6  per  cent  bonds,  series  C,  of  the  par 
value  of  $400,000 ;  (4)  upon  the  making  of  the  fourth  installment, 
$260,000,  by  the  further  pledge  of  applicant's  refunding-mortgage 
6  per  cent  bonds,  series  C,  of  the  par  value  of  $400,000,  and  also  by 
the  deposit  of  a  surety  bond  in  the  sum  of  $260,000  (said  surety  bond 
to  be  approved  by  the  Commission)  guaranteeing  the  subsequent 
pledge  as  further  security  of  applicant's  refunding-mortgage  6  per 
cent  bonds,  series  C,  of  the  par  value  of  $260,000;  and  (5)  the  col- 
lateral security  pledged  in  respect  of  each  installment  of  the  loan 
shall  be  applicable  to  secure  the  repayment  of  the  entire  loan. 

{c)  The  entire  loan,  $1,460,000,  shall  be  repaid  in  10  annual  in- 
stallments of  $146,000  each,  on  the  Brst  to  tenth  anniversaries,  inclu- 
sive, of  the  date  of  the  making  of  the  first  installment  of  the  loan, 
(rf)  The  applicant  may  repay  all  or  any  part  of  the  loan  before 
maturity.  The  collateral  security  shall  be  released  proportionately 
as  parts  of  the  loan  are  repaid. 

(e)  The  applicant  shall,  on  demand  of  the  Secretary  of  the  Treas- 
ury, with  the  concurrence  of  the  Interstate  Commerce  Commission, 
deposit  with  the  Secretary  of  the  Treasury,  such  additional  security 
as  may  be  from  time  to  time  required.    The  securities  pledged,  to- 

«3 1.  C.  C. 


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LOAD  TO  WHBBUHO  *  IiAKE  ERIE  ST.  221 

geth«T  with  ajiy  that  may  be  pledged  hereafter  or  may  have  been 
pledged  heretofore,  aa  Becnrity  for  this  loan  or  any  other  obligation 
of  the  said  applicant  to  the  United  States  for  loans  under  section 
910  of  the  transportation  act,  1920,  as  amended,  or  for  indebtedness 
to  the  United  States  Railroad  Administration  for  additions  and 
betterments  and  for  balances  on  open  account,  shall  be  applicable  in 
like  manner  to  secure  the  payment  of  any  and  all  such  loans  and 
indebtedness. 

(/)  The  applicant  has  agned  in  an  instrument  in  Tvriting,  dated 
the  26th  day  of  September,  1990,  filed  with  the  Interstate  Commerce 
Commission,  to  the  following  conditions:  (1)  That  the  amount  to  be 
financed  by  it  in  connection  with  the  loan  shall  be  so  financed  that  the 
cost  to  it  of  any  loans  secured  from  sources  other  than  the  United 
States  government  ;^all  not  exceed  7^  per  cent  per  annum,  including 
in  such  cost  discounts,  attorneys'  fees,  and  any  and  all  other  expenses 
in  connection  therewith;  (2)  the  expenditures  made  from  the  loan 
for  additions  and  betterments  shall  be  confined  to  ^ch  expenditures 
ap  may  be  chargeable  to  accounts  for  investment  in  road  and  equip- 
ment provided  in  the  Commission's  accounting  classification  for 
eteam  roads  in  effect  at  the  time  the  expenditures  may  be  made;  and 
(3)  the  applicant  shall  furnish  the  Commission,  on  or  about  January 
1  and  July  1,  1921,  the  detailed  certificate,  under  oath  of  its  chief 
engineer,  showing  the  character  and  costs  of  the  additions  and  better- 
ments made  with  or  in  connection  with  this  loan  for  said  purposes. 
The  loan  for  additions  and  betterments  shall  have  been  expended 
or  definitely  obligated  for  the  purposes  for  which  loaned,  or  shall 
be  repaid  to  the  United  States,  on  or  before  November  1,  1921.  In 
the  event  that  the  Commission  shall  certify  to  the  Secretary  of  the 
Treasury  that  the  applicant  has  failed  or  refused  well  and  truly  to 
comply  with  any  one  or  more  of  the  terms  and  conditions  contained 
in  said  agreement,  the  whole  or  any  part  of  the  obligations  evidenc- 
ing the  loan,  as  the  Commission  may  designate,  shall,  at  the  option  of 
the  holder,  become  due  and  payable.     ' 

6.  TTiat  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  secnrity  offered,  furnish,  in  the 
opinion  of  the  Commission,  reasonnblie  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor,  and  reason- 
able protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  ia  unable 
to  provide  itself  with  the  funds  necessary  'for  the  aforesaid  purpose 
from  other  sources. 

Done  in  Washington,  D.  C.,  this  ^Hh  day  of  September,  1920. 
65l.C.a 


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222  IHTBRSTATB  commsbcb  cohmissiok  befobts. 

Certificate  No,  SS  for  a  Loon  mnder  Section  SIO  of  the  Transportation 
Act,  1990,  aa  Amended. 

Th«  Inteistate  Commerce  CommiadoD  certifies  to  the  Secretary  of 
the  TreasDiy  ite  findings: 

L  That  the  making  of  a  loan  of  $1,000,000  by  the  Uoited  titates 
to  the  Wheeling  &  Lake  Erie  Railway  Company,  hereinafter  referred 
to  as  the  applicant,  for  the  parpoee  of  enabling  it  to  meet  in  part  its 
matoring  indebtedness,  consisting  of  sbort-tnm  obligations  matur- 
ing in  the  month  of  December,  19^,  is  necessary  to  enable  the  appli- 
cant properly  to  meet  the  transportation  needs  of  the  public. 

2.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  soch  as  to  fumiBfa 
reasonable  assurance  of  the  applicant's  abili^  to  repay  the  loan 
within  the  time  fixed  therefor  and  to  meet  its  other  obligations  in 
connection  with  such  loan. 

3.  That  the  amount  of  the  loan  which  is  to  be  made  is  $1,000,000. 

4.  That  Uie  time  for  the  making  thereof,  within  which  the  loan 
is  to  be  repaid  in  full,  is  five  years. 

3.  That  the  terms  and  conditions  of  the  loan,  including  the  security 
to  be  given  for  repayment,  are : 

(a)  The  loan  shall  be  for  $1,000,000  and  shall  be  collaterally 
secured  by  the  pledge  of  Wheeling  &  Lake  Erie  Railway  Company 
refunding-mortgage  5  per  cent  bonds  in  the  par  value  of  $1,800,000, 
due  September  1,  1966. 

{h)  The  loan  ^all  be  repaid  five  yean  frcan  the  date  thereof.  The 
applicant  may  repay  all  or  any  part  of  the  loan  before  maturity. 
'fh.'b  collateral  security  shall  be  released  proportionately  as  parts  of 
the  loan  are  repaid. 

(c)  The  applicant  shall,  on  demand  of  the  Secretaiy  of  the 
Treasury,  with  the  concurrence  of  the  Interstate  Commerce  Com- 
mission, deposit  with  the  Secretary  of  the  Treasury  such  additional 
security  as  may  be  from  time  to  time  required.  The  securities 
pledged,  together  with  any  that  may  be  pledged  hereafter  or  may 
have  been  pledged  heretofore  as  security  for  this  loan  or  any  other 
obligation  of  the  said  applicant  to  the  United  States  for  loans  under 
section  210  of  the  transportation  act,  1920,  as  amended,  or  for 
indebtedness  to  the  United  States  fisilroad  Administration  for  addi- 
tions and  betterments  and/or  balances  on  open  account,  shall  be  ap- 
plicable in  like  manner  to  secure  the  payment  of  any  and  all  such 
loans  and  indebtedness. 

{d)  The  appUcant  has  agreed,  in  an  instrument  in  writing  dated 
the  25th  day  of  September,  1920,  filed  with  the  Interstate  Commerce 
CommissioD,  to  the  following  conditions:  (1)  That  the  amount  to 

05 1.0,01 


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LOAN  TO  WHBBUNQ  A  LAKE  ISRIE  BT.  223 

be  financed  by  it  in  connection  witb  the  loan  shall  be  so  financed  that 
the  cost  to  it  of  any  loans  secured  from  sources  other  than  the  United 
States  government  shall  not  exceed  7^  per  cent  per  annum,  including 
in  such  coat  discounts,  attorneys'  fees,  and  any  and  all  other  expenses 
in  connection  therewith.  In  the  event  that  the  Commission  shall 
certify  to  the  Secretary  of  the  Treasury  that  the  applicant  has  failed 
or  ruf  osed  well  and  truly  to  comply  with  any  one  or  more  of  the  terms 
and  conditions  contained  in  said  agreement,  the  whole  or  any  part  of 
the  obligations  evidencing  the  loan,  as  the  Commission  may  designate, ' 
shall,  at  the  option  of  the  holder,  become  due  and  payable. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish,  in  the 
opinion  of  the  Commission,  reasonable  assuranoe  of  the  applicant'Ei 
ability  to  repay  the  loan  within  the  time  fixed  therefor,  and  reason- 
able protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  itself  with  the  funds  necessary  for  the  aforesaid  pur- 
pose from  other  sources. 

Done  in  Washington,  D.  C,  this  29th  day  of  September,  1920. 
6SLG.G. 


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UTTBBSIATB  COUUBRCB  OOUmSSIOB  BBFOUS. 


Finance  Docket  No.  945. 

IN  THE  MATTER  OF  THE  APPUCATION  OF  THE  CHI- 
CAGO, ROCK  ISLAND  A  PACIFIC  RAILWAY  COMPANY 
FOR  A  LOAN  FROM  THE  UNITED  STATES  TO  AID  IN 
PROVIDING  EQUIPMENT  AND  OTHER  ADDITIONS  AND 
BETTERMENTS  AND  IN  MEETING  MATURING  IN- 
DEBTEDNESa 


StibmUtea  September  Zi,  19Z0.    Deofied  Septmtbar  t9.  mO. 


Appllcstloa  granted  In  part  and  loin  of  $2,000^100  apjpnred. 

M.  L.  Bell  for  applicant 

Report  of  the  CoHinsBioN. 
Division  4,  Cohhissionebs  Meter,  Daniels,. EAffncAM,  and  Pott^, 
Bt  Divibion  4 : 

The  Chicago,  Rock  Island  &  Pacific  Railway  Company,  a  carrier 
by  railroad  subject  to  the  interstate  commerce  act,  hereinafter  referred 
to  as  the  applicant,  on  May  27,  1920,  made  application  to  the  Inter- 
state Commerce  Commission  for  a  loan  from  the  United  States  in 
accordance  with  section  210  of  the  transportation  act,  and  on  June 
19,  1920,  the  applicant  amended  and  supplemented  its  applica- 
tion pursuant  to  the  Commission's  announcement  of  June  7,  1920, 
of  the  general  principles  by  which  it  would  be  governed  in  ad- 
ministering the  fund  created  by  said  section  of  the  said  act 

In  the  application,  as  amended  and  supplemented,  the  carrier  seta 
forth: 

1.  That  the  amount  of  the  loan  desired  is  $18,955,978. 

2.  That  the  term  for  which  the  loan  is  desired  is  five  years. 

3.  That  the  purpose  of  the  loan  is  to  assist  the  applicant  in  pro- 
viding itself  with  equipment,  additions  and  betterments,  and  meeting 
maturities,  as  follows: 

Eqaipment :  ttrau.  VataL 

Locomotives $2, 638, 750] 

FrelKht-train  can 1,629, 000  [$5,816, 000 

Paeaenger-traln  cara 1,  US,  20oJ 

Additions  and  betterments : 

To  way  and  atmcturea 6,800;0001 

To  equipment l,600i000j  o-^O^wO 

Maturitlea 7,907.978 

Grand  total 21,618,708 


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Irf)AK  TO  OHIOAOO,  BOCK  ISLUTD  A  PACIFIC  KT.  225 

4.  That  the  uses  to  which  the  loan  will  be  applied  are  as  herein- 
before stated. 

5.  The  present  and  prospective  ability  of  the  applicant  to  repay 
the  loan  and  to  meet  its  obligations  in  regard  thereto. 

6.  That  the  security  offered  is : 

Cblcago,    Rock    Island    &    Pacific    lUUway    Company    first    and 

refundfDg  mortgage  gold  bonds  ($1,000,000  In  process  of  Issue)—  $7,744,000 
Arkansas  &  Memphis  Itallwa^  Bridge  &  Terminal  Company  bonds—  925,000 
Bock  Island  Improvement  Company: 

Blue  Island  shop  bocdi 199,000 

Cedar  Rapids  Terminal  gold  bonds 869.733 

Little  Rack   mortgage  gold   bonds 27^492 

Peoria  Terminal  gold  bonds 290,248 

Rock  iBland-Memphls  Terminal  Railway  Company  Depot  &  Terminal 

first-mortgage  bonds  1,300,000 

Rock  IslandOmaha  Terminal  Railway  Company  first-mortgage  gold 

bonds  800,000 

Rock  Island-Arkansas  &  Louisiana  Railroad  Company  flnA-mortgagv 

bonds   15,000 


United  States  OoTemment  second  liberty  loan  bonds,  converted.. 


7.  That  the  extent  to  which  the  public  convenience  and  necessity 
will  be  served  by  the  loan  is  that  the  movement  of  traffic  will  be 
expedited  and  congestion  and  delays  relieved. 

The  application  was  accompanied  by  such  facts  and  details  as 
the  Commission  required  with  respect  to  the  physical  situation, 
owner^p,  capitalization,  indebtedness,  csntract  obligations,  opera- 
tion, and  earning  power  of  the  applicant,  together  with  sudi  other 
facts  relating  to  the  propriety  and  expediuu^  of  granting  the  loan 
applied  for  and  the  ability  of  the  applicant  to  make  good  the  dbliga- 
tion,  as  the  Commission  deemed  pertinent  to  the  inquiry. 

The  applicant, 'by  its  general  counsel,  M.  L.  Bell,  Sept^nber  10, 
1920,  orally  requested  deferred  consideration  of  that  portion  of  its 
application  in  re^>ect  of  additions  and  betterments.  The  Commis- 
sioD  is  of  the  opinion  that  consideration  of  the  making  of  the  loan 
i<x  additions  and  betterments  should  be  deferred,  and  so  finds. 

The  request  for  a  loan  in  req>ect  of  equipment  will  be  given 
deferred  consideration. 

After  inveetigation,  the  Commission  finds  that  the  making  of  a 
loan  of  $3,000,000  for  the  purpose  of  aiding  the  applicant  in  meeting 
its  maturing  indebtedness  in  tba  manner  hereinbelow  set  forth — 
88844'— 22— TOT  flB 15 


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IBTBBSIATB  OOHMBBOB  OOHHIBSIOn  BBFOSTB. 


U*tiiiiU«. 

Amoont. 

S. 

B? 

3B 

18,1«.M 

it,Qao.co 

Ha),i]a>.iio 

t,  too,  000.00 

17D;oao:DO 

i3;moo 

80,811.00 

u.ia« 

iLOoaao 
sssjooaoo 

Cmlral  Tmsl  Compin  j  of  lUlnoli  loan  du«  liiiy  9,  rnao 

One-year  Bper  eon  1  mllaloral-trasl  gold  tmoda,  matuiing  Octo- 

Ki,oao.ooo.oo 

t^^X^y^^ir^iii-ii^t^y'ii'^^^-- 

Sqnlpmvit  gatd  boii<^,  nri«  D,  doi  Ntrnmber  i,  im 

I,Mff,«7I.40 

l,nT,S71.«) 

is  necessary  in  order  to  enable  the  applicant  properly  to  meet  the 
transportation  needs  of  the  public 

The  Commission  further  finds  that  the  prospective  earning  power 
of  the  applicant  and  the  character  and  value  of  the  security  offered 
afford  reasonable  assurance  of  the  applicant's  ability  to  repay  the 
loan  within  the  time  fixed  therefor,  and  to  meet  its  oUier  obligations 
in  connection  with  such  loan,  and  afford  reasonable  protection  to  the 
United  States,  and  that  the  applicant  is  unable  to  provide  itself  with 
the  funds  necessary  for  the  above-mentioned  purposes  from  other 
Bonrcee. 

An  appropriate  certificate  will  be  issoed. 


Certificftte  No.  SS  for  a  Loan  under  Seotion  SIO  of  tke  Trantportation 
Act,  19S0,  at  Amended. 
The  Interstate  Commerce  Commission  certifies  to  the  Secretary  of 
the  Treasury  its  findings: 

1.  That  the  making  of  a  loan  of  $2,000,000  by  the  United  States  to 
the  Chicago,  Bock  Island  &  Pacific  Railway  Company  hereinafter 
referred  to  as  the  applicant,  for  Uie  purpose  of  aiding  the  applicant 
to  meet  its  maturing  indebtedness,  is  necessary  to  enable  the  aj^Ucant 
properly  to  meet  the  transportation  needs  of  the  public. 

2.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  furnish 
reasonable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor  and  to  meet  its  other  obligations  in 
connection  with  such  loan. 

8.  That  the  amount  of  the  loan  which  is  to  be  made  is  $2,000,000, 
4.  That  the  time  from  the  making  thereof  within  which  the  loan 
is  to  be  repaid  in  full  is  five  years. 


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JJOAH  TO  OH104QO,  BOOK  ISLAKD  A  PACUTO  KT.  227 

6.  That  the  t«nns  and  conditioiu  of  the  loan,  including  tite  aecority 
to  be  given  for  repayment,  are  u  follows : 

(a)  The  loan  in  the  amount  of  $2,000,000  shall  mature  five  yean 
from  the  date  of  the  making  thereof,  and  shall  be  collaterally  secured 
by  $3,639,000,  par  value,  of  the  applicant's  first  and  refunding  4  per- 
cent gold  bonds,  maturing  April  1, 1934. 

(i)  The  applicant  shall,  on  demand  of  the  Secretary  of  tiie  Treas- 
ury, with  the  concurrence  of  the  Interstate  Commerce  Commission, 
deposit  with  the  Secretary  of  the  Treasury  such  additional  security 
as  may  be  from  time  to  time  required.  The  securities  pledged,  to- 
grther  with  any  that  may  be  pledged  hereafter  or  may  hare  been 
pledged  heretofore,  as  security  for  this  loan  or  any  other  obligations 
of  the  said  applicant  to  the  United  States  for  loam  under  section 
210  of  the  transportation  act,  1920,  as  amended,  or  for  indebtedness 
to  the  United  States  Railroad  Administration  for  additions  and  bet- 
terments and  for  the  balances  on  open  account  shall  be  applicable  in 
like  manner  to  secure  the  repayment  of  any  and  all  such  loans  and  in- 
debtedness. 

(c)  The  applicant  has  agreed  in  an  instrument  in  writing,  dated 
the  24th  day  of  September,  1920,  filed  with  the  Interstate  Com- 
merce Commission,  to  the  following  conditions:  (1)  That  the  amount 
to  be  financed  by  it  in  connection  with  tbe  loan  shall  be  so  financed 
that  the  cost  to  it  of  any  loans  secured  from  sources  other  than  the 
United  States  government  shall  not  exceed  7^  per  cent  per  annum, 
including  in  such  cost  discounts,  attorneys'  fees,  and  any  and  all 
other  expenses  in  connection  therewith. 

In  event  the  Commission  shall  certify  to  the  Secretary  of  the 
Treasury  that  the  applicant  has  failed  or  refused  well  and  truly 
to  comply  with  any  one  or  more  of  the  terms  and  conditions  con- 
tained in  said  agreement^  the  whole  or  any  part  of  the  obligations 
evidencing  the  loan,  as  the  Commission  may  designate,  shall,  at  the 
option  of  the  holder,  become  due  and  payable. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish,  in  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor,  and  reason- 
able protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  un- 
able to  provide  itself  from  other  sources  with  funds  necessary  for 
the  aforesaid  purposes. 

Done  in  Washington,  D.  C.,  this  29th  day  of  September,  1920. 
66Laa 


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228  IKTBBSTATE  COMHBROE  CWMHIBSION  REFOBTS. 

Amended  Certificate  No.  S3  for  a  Loan  under  Section  tl0  of  the 
Transportation  Act,  19W,  <u  Amended. 
The  Interstate  Commerce  Coinmission  further  certifies  to  tbe 
Secretary  of  the  Treasury  its  findings : 

1.  That  the  making  of  a  loan  of  $2,000,000  by  the  United  Stat«s 
to  the  Chicago,  Rook  Island  &  Pacific  Railway  Company,  herein- 
after referred  to  as  the  applicant,  for  the  purpose  of  aiding  the 
applicant  to  meet  its  maturing  indebtedness  is  necessary  to  enable 
the  applicant  properly  to  meet  the  transportation  needs  of  the 
public. 

2.  That  tbe  prospective  earning  power  of  tbe  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  fumidi 
reasonable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor  and  to  meet  its  other  obligations  in 
connection  with  such  loan. 

3.  That  the  amount  of  the  loan  which  is  to  be  made  is  $2,000,000. 

4.  That  the  time  from  tbe  making  thereof,  within  which  the  loan 
is  to  be  repaid  in  fnll,  is  five  years. 

6.  That  the  terms  and  conditions  of  the  loan,  including  tbe  se* 
curity  to  be  given  for  repayment,  are  as  follows : 

(a)  The  loan  in  the  amount  of  $2,000,000  shall  mature  five  years 
from  the  date  of  the  making  thereof  and  shall  be  collaterally  se- 
cured by  $3,636,000,  par  value,  of  tbe  applicant's  first  and  refund- 
ing 4  per  cent  gold  bonds,  maturing  April  1, 19S4. 

(b)  The  applicant  shall,  on  demand  of  the  Secretary  of  the 
Treasury,  with  the  concurrence  of  the  Interstate  Commerce  Commis- 
sion, deposit  with  the  Secretary  of  the  Treasury  such  additional 
security  as  may  be  from  time  to  time  required.  The  securities 
pledged,  together  with  any  that  may  be  pledged  hereafter  or  may 
have  been  pledged  heretofore,  as  security  for  this  loan  or  any  other 
obligations  of  the  said  applicant  to  the  United  States  for  loans  under 
section  210  of  the  transportation  act,  1920,  as  amended,  shall  be  appli- 
cable in  like  manner  to  secure  the  repayment  of  any  and  all  such 
loans. 

(c)  The  applicant  has  agreed  is  an  instrument  in  writing,  dated 
the  24th  day  of  September,  1920,  filed  with  tbe  Interstate  Commerce 
Commission,  to  the  following  conditions :  (1)  That  the  amount  to  be 
financed  by  it  in  connection  -with  tbe  loan  shall  be  so  financed  that 
the  cost  to  it  of  any  loans  secured  from  sources  other  than  the  United 
States  government  shall  not  exceed  7i  per  cent  per  annum,  including 
in  such  cost  discounts,  attomei^s'  fees,  and  any  and  all  other  expenses 
in  connection  therewitii.  In  event  tbe  Commission  shall  certify  to 
the  Secretary  of  the  Treasury  that  tbe  applicant  has  failed  or  refused 
well  and  truly  to  comply  with  any  one  or  more  of  the  terms  and 

6si.ac. 


LOAN  TO  CHICAQO,  BOCK  ISLLSD  *  PAODIO  ET.  229 

conditioDfl  coDtained  in  said  agreement,  the  whole  or  any  part  of  the 
obligations  evidencing  the  loan,  as  the  Commission  may  designate, 
shall,  at  the  option  of  the  holder,  become  due  and  payable. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish,  in  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant's 
mbility  to  repay  the  loan  within  the  time  fixed  therefor  and  reason- 
able protection  to  tiie  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Conunission,  is  unable 
to  provide  itself  from  other  sources  with  funds  necessary  for  the 
aforesaid  purposes. 

Done  in  Washington,  D.  C,  this  30th  day  of  September,  1920. 
65l.aa 


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DTTEBSTATB  OOHHBBOB  OOMKIBSIOir  BBPOBDM. 


FlKANOB  DoOKBI  No.  60. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  CHI- 
CAGO &  WESTERN  INDIANA  RAILROAD  COMPANY 
FOR  AUTHORITY  TO  ISSUE  COLLATERAL-TRUST 
BONDS  AND  COLLATERAL-TRUST  NOTES,  AND  TO 
PLEDGE  MORTGAGE  BONDS  AS  SECURITY  THEREFOR 
AND  FOR  A  LOAN  FROM  THE  UNITED  STATES. 


Sultmttted  Baptmiber  £0,  ISK.    DetMed  September  SO,  I9t0. 


Anthorltr  cranted: 

1.  To  lasve  |7,000,000  of  IS-year  7}  per  cent  collateral-trast  Blnkliig-fnnd  fold 

bonds  under  &  certain  collateral-tnut  agreement,  and  to  pledge  $9,800,0(0 
of  applicant's  drat  and  refanding  mortgage  5  per  cent  gold  bODda,  series 
A,  as  security  for  aaid  col  lateral- trust  bonds. 

2.  To  Ume  |1,000,000  of  15-;ear  6  per  cent  collateral- trust  gold  notes  nndv  a 

certain  collateral-tmst  agreement  and  to  pledge  $1,260,000  of  aivUcaiit*s 
first  and  refunding  mortgage  D  per  cent  gold  booda,  series  A,  as  Becnrity 
tor  laid  notes. 
8.  To  pledge  $10,000,000  of  said  first  and  refunding  mortgage  6  per  cent  gold 
bonds,  aeries  A,  wltb  the  Secretary  of  the  Treasury  as  securl^  for  a 
loan  of  $8,000,000  from  tbe  United  States  under  section  210  of  tbe  tnms- 
portacion  act,  1920,  as  amended. 

C.  G.  Au$tin,  jr.f  for  applicant. 

Report  and  Order  of  the  Cohuibsion. 
Division  4,  Coif hibsionebs  Meter,  Danieu,  Easihan,  and  Potter. 
Br  DiviflioN  4 : 

It  appearing.  That  tbe  Chicago  A  Western  Indiana  Railroad  Com- 
pany,  a  common  carrier  b;  railroad  engaged  in  interstate  commerce, 
has  made  application  to  this  Commiasion  under  section  20a  of  the 
interstate  commerce  act  for  authority  (1)  to  issue  15-year  7^  per 
cent  collateral-trust  sinking-fund  gold  bonds  in  a  principal  amount 
not  to  exceed  $7,500,000,  under  a  proposed  collateral-trust  agreement 
to  be  dated  September  1,  1920,  between  applicant  and  the  Bankers 
Trust  Company,  New  York,  N.  Y.,  and  to  make  pledge  thereunder  of 
$10,500,000  of  applicant's  first  and  refunding  mortgage  6  per 
cent  gold  bonds,  series  A,  heretofore  nominally  issued  and  pledged 
with  the  Bankers  Trust  Company,  trustee,  as  part  security  for 
$15,000,000  of  one-year  6  per  cent  collateral-trust  gold  notes, 
extended  to  become  due  and  payable  on  September  1,  1920 ;  (2)  to 

fl5i.aa 

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OHIOAOO  A  WBBTBBK  ISPIINA  BOZTDS.  281 

isme  10-y«u  6  per  cent  ooll«tenl-truat  gold  notes  in  the  principal 
amount  of  $1,000,000,  under  a  proposed  collateral-bnist  agre«nent  to 
be  dated  September  1,  1920,  between  applicant  and  the  Central 
Trust  Company  of  niinois,  and  to  pledge  thereunder  $1,2S0,000 
of  applicant's  first  and  refunding  mortgage  6  per  cent  gold  bonds, 
series  A,  which  have  been  heretofore  nominally  issued  uid  pledged 
■with  the  Central  Trust  Company  of  Illinois,  trustee,  as  security  for 
$1,000,000  of  one-year  6  per  cent  collateral-trust  gold  notes,  extended 
to  become  due  and  payable  on  September  1, 1920;  and  (3)  to  pledge 
$10,600,000  of  applicant's  first  and  refunding  mortgage  6  per  cent 
gold  bonds,  series  A,  with  the  Secretary  of  the  Treasury,  as  security 
for  a  loan  of  $8,000,000  from  the  United  States  to  the  applicant, 
pursuant  to  certificate  No.  18  of  this  Commiesion,  issued  in  accord- 
ance with  section  210  of  the  transportation  act,  1920,  as  amended, 
said  $10,500,000  of  said  series-A  bonds  having  been  heretofore  nomi- 
nally issued  and  pledged  with  the  Bankers  Trust  Company,  as  part 
security  for  the  $15,000,000  of  one-year  6  per  cent  collateral-trust 
gold  notes  extended ;  and 

It  further  ap-pearing,  That  said  application  was  made  in  such  form 
and  contained  such  matters,  as  the  Commission  prescribed,  and  that 
it  was  made  under  oatii,  signed,  and  filed  on  behalf  of  said  carrier 
by  one  of  its  executive  officers  having  knowledge  of  the  matters 
therein  set  forth  and  duly  designated  for  that  purpose  by  the  car- 
rier; and 

//  further  appearing.  That  notice  of  the  filing  of  said  application 
has  been  given  to,  and  a  copy  thereof  filed  with,  the  governor  of  thoi 
state  of  Illinois,  the  only  state  in  which  said  carrier  operates,  ant^ 
that  no  objection  to  the  iomance  by  this  Commission  of  an  order 
granting  the  application  has  been  offered  by  the  state  public  utilities 
commission  or  other  appropriate  authority  of  said  state;  and 

It  further  appearing,  That  the  application  has  been  duly  heard  and 
submitted,  and  that  full  investigation  of  the  matters  and  things  in- 
volved in  this  proceeding  has  been  had : 

Held,  Tliat  the  proposed  issues  by  the  Chicago  &  Western  Indiana 
Bailroad  Company  of  said  Ifi-year  H  per  cent  collateral-trust  sink- 
ing-fund gold  bonds  in  an  aggregate  principal  amount  of  $7,000,000, 
with  the  pledge  of  $9,800,000  of  series-A  bonds  as  security  therefor; 
and  of  said  15-year  6  per  cent  collateral-trust  gold  notes  in  an  aggre- 
gate principal  amount  of  $1,000,000,  with  the  pledge  of  $1,260,000  of 
series-A  bonds  as  security  therefor;  and  the  proposed  pledge  by  the 
Chicago  &  Western  Indiana  Railroad  Company  of  $10,600,000  of 
said  series-A  bonds  as  security  for  a  loan  of  $8,000,000  from  the 
United  States  to  the  applicant  (a)  are  for  lawful  objects  within 
its  corporate  purposes,  and  compatible  with  the  public  interest;  which 

65i.ao. 


232  nTTEBSTATE  OOMHBBOEi  00UMIS8I0H  BEPOBTS. 

are  neceasary  and  appropriate  for  and  consistent  •mih  the  proper  per- 
formance by  it  of  service  to  the  public  as  a  common  carrier,  and 
which  will  not  impair  its  ability  to  perform  that  senrice;  and  (&) 
are  reasonably  nece^ary  and  appropriate  for  such  purpose. 

/f  is  therefore  ordered,  That  the  Chicago  &  Western  Indiana  B«il- 
road  Company  be,  and  it  is  hereby,  authorized  (1)  to  issue  as  of 
September  1, 1920,  $7,000,000  of  bonds  to  be  known  as  Ifi-year  7^  per 
cent  collateral-trust  sinking-fund  gold  bonds,  to  be  issued  under  and 
pursuant  to,  and  to  be  secured  by,  said  trust  agreement  to  be  entered 
into  between  the  Chicago  &  Western  Indiana  Railroad  Company  and 
the  Bankers  Trust  Company ;  the  bonds  to  bear  interest  at  the  rate 
of  7i  per  cent  per  annum,  payable  semiannually  on  the  1st  day  of 
March  and  the  1st  day  of  September  of  each  year,  and  the  principal 
thereof  to  be  payable  September  1,  1986;  to  be  redeemable  at  tiie 
option  of  tiie  Chicago  &  Western  Indiana  Railroad  Cwnpany  on  any 
interest  day  before  maturity  at  108.6  per  cent  of  par  value,  in  accord- 
ance with  the  terms  of  the  trust  agreement;  said  bonds  to  be  in  the 
form  submitted  with  the  application ;  and  (2)  to  pledge  $8,800,000 
of  applicant's  first  and  refunding  mortgage  6  per  cent  gold  bonds, 
series  A,  with  the  Bankers  Trust  Company  under  the  proposed  col- 
lateral-trust agreement  with  that  company,  as  security  for  the  pay- 
ment of  the  principal  and  interest  of  tha  collateral>trust  sinking- 
fund  bonds;  said  collateral-trust  sinking-fund  bonds,  or  the  proceeds 
thereof,  to  be  used  solely  for  the  purpose  of  paying  or  retiring  appli- 
cant's one-year  6  per  cent  collateral-trust  gold  notes,  in  a  principal 
amount  of  $7,000,000  heretofore  extended  to  become  due  and  payable 
September  1, 1920. 

It  is  further  ordered,  That  the  Chicago  &.  Western  Indiana  Rail- 
road Company  be,  and  it  is  hereby,  authorized  (1)  to  issue,  as  of 
September  1, 1920,  $1,000,000  of  notes  to  be  known  as  16-year  G  per 
cent  collateral-trust  gold  notes,  to  be  issued  under  and  pursuant  to, 
and  to  be  secured  by,  the  trust  agreement  to  be  entered  into  between 
the  Chicago  &  Western  Indiana  Railroad  Company  and  the  Central 
Trust  Company  of  Illinois,  these  notes  to  bear  interest  at  the  rate  of 
6  per  cent  per  annum,  payable  semiannually,  on  the  1st  day  of  March 
and  the  1st  day  of  September  of  each  year,  and  the  principal  thereof 
to  be  payable  September  1,  1936 ;  said  notes  to  be  redeemable  at  the 
option  of  the  Chicago  A  Western  Indiana  Railroad  Company  at  any 
time  before  maturity  by  payment  of  the  principal  thereof,  together 
with  unpaid  interest  then  accrued,  as  provided  in  the  trust  agree- 
ment ;  said  notes  to  be  in  the  form  submitted  with  the  appllcacion ; 
and  (3)  to  pledge  $1,260,000  of  applicant's  first  and  refunding  mort- 
gage 5  per  cent  gold  bonds,  series  A,  with  the  Central  Trust  Com- 
pany of  Illinois  under  the  proposed  collateral-trust  agreement  with 

65I.C.a 


,,C^tHli^lc 


OHIOAGO  ft  WBSTBItir  HTDUNA  BOKSS.  233 

that  otxnpany,  as  security  for  tbe  payment  of  the  principal  and 
interest  of  the  collateral-trust  gold  notes ;  said  collateral-trust  gold 
notes,  or  the  proceeds  thereof,  to  be  used  solely  for  the  purpose  of 
paying  or  retiring  $1,000,000  of  applicant's  one-year  6  per  cent 
coUateral-trust  gold  notes  heretofore  extended  to  become  due  and 
payable  September  1, 1920. 

It  it  further  ordered.  That  the  Chicago  A  Western  Indiana  Bail- 
road  Company  be,  and  it  is  hereby,  authorized  to  pledge  $10,600,000 
of  its  first  and  refunding  mortgage  6  per  cent  gold  bonds,  series  A, 
with  the  Secretary  of  the  Treasury,  as  security  for  a  loan  of  $8,000,000 
from  the  United  States  to  the  applicant,  pursuant  to  certificate  No. 
18  of  this  Commission,  issued  in  accordance  with  section  210  of  the 
transportation  act,  1920,  as  amended. 

It  i»  further  ordered.  That  said  15-year  7^  per  cent  collateral-trust 
sinking-fund  gold  bonds,  and  said  15-year  fi  per  cent  collateral-trust 
gold  notes,  herein  authorized  to  be  issued,  shall  not  be  sold,  disposed 
of,  pledged  or  repledged,  or  otherwise  used  for  any  purpose  or  in 
any  manner  other  than  aa  authorized  in  this  order. 

It  is  further  ordered,  That  the  applicant  shall  furnish  to  this 
Commission  periodical  statements,  properly  Terifled,  showing  all 
pertinent  facts  in  connection  with  the  use  of  said  16-year  7^  per  cent 
collateral-trust  sinking-fund  gold  bonds,  or  the  proceeds  thereof,  and 
of  said  16-year  6  per  cmt  collateral-trust  gold  notes,  or  the  proceeds 
thereof;  the  first  stat^nent  to  be  made  60  days  after  the  date  of  this 
order  and  subsequent  statements  to  be  made  every  60  days  there- 
after until  all  of  said  bonds  and  notes,  and  the  proceeds  thereof,  shall 
have  been  used  as  herein  authorized. 

It  is  further  ordered,  That  the  Chicago  A  Western  Indiana  Rail- 
road Company  shall  make  report  to  this  Commission  of  the  deposits 
and  pledgee  of  said  first  and  refunding  mortgage  6  per  cent  gold 
bonds,  series  A,  with  the  Bankers  Trust  Company,  the  Central 
Trust  Company  of  Illinois,  and  the  Secretary  of  the  Treasury,  as 
herein  authorized,  within  10  days  after  the  same  shall  have  been  so 
deposited  and  pledged ;  and  that  said  applicant  shall  make  report  to 
this  Commission  of  the  release  of  said  bonds  from  such  pledges 
within  10  days  after  the  same  shall  have  been  so  released. 

And  it  is  further  ordered.  That  nothing  herein  shall  be  construed 
to  imply  any  guaranty  or  obligation  as  to  said  15-year  7^  per  cent 
collateral-trust  sinking-fund  gold  bonds,  or  interest  thereon,  or  as  to 
said  16-year  6  per  cent  coUateral-trust  gold  notes,  or  interest  thereon, 
on  the  part  of  the  United  States. 

flSLaa 


Digilzed  by  Google 


UTTEBSUTE  COUCBBGE  OOHICSSION  BBPOAIB. 


FlKAHOB  DOOSIIT  No.  925. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  BALTI- 
MORE &  OHIO  RAILROAD  COMPANY  FOR  A  LOAN 
FROM  THE  UNITED  STATES  TO  PROVIDE  ADDITIONS 
AND  BETTERMENTS. 


Bvlmttted  September  14,  lOtO.    Decided  October  ;,  19tO. 


Appll(;atioti  granted  In  part  and  a  loan  of  fS,000,000  approved, 

George  M.  Skriver  for  applicant. 

RCPORT  or  THB  ComnsBioN. 
Division  4,  Comuibsionbbs  Meteb,  Dakisu,  Easthan,  and  Potixb. 
Bt  Division  4 ; 

The  Baltimore  4  Ohio  Railroad  Company,  a  carrier  1^  railroad 
subject  to  the  iiit«rstate  commerce  act,  hereinafter  referred  to  as  the 
applicant,  on  May  29,  1920,  made  application  to  the  Interstate  Com- 
merce  Commission  for  a  loan  from  the  United  States  in  accordance 
with  section  210  of  the  transportation  act,  1920,  to  provide  itself 
with  equipment  and  other  additions  and  betterments.  The  applica- 
tion was  amended  on  July  13,  1920,  and  was  further  amended  Sep- 
tember 9  and  September  IS,  1920. 

In  the  application,  as  amended,  the  applicant  sets  forth : 

1.  That  the  amount  of  the  loan  desred  is  $8,200,000. 

2.  That  the  term  for  which  the  loan  is  desired  is  Itt  years. 

3.  That  the  purposes  of  the  loan  and  the  uses  to  which  it  will  b« 
applied  are  to  enable  the  applicant  to  provide  itself  with  new 
freight-train  equipment  and  additions  and  betterments  to  way  and 
structures,  to  promote  the  movement  of  freight-train  cars. 

BqnipmeDt  to  be  acqalred  through  the  National  Railway  Service 
Corporation : 

1,000  box  cars  (80,000  ponndi'  capadlr),  at  12,620 

1,200  bopper  cara  <100,000  ponnda'  capacity),  at  |1,B19- 

1,000  hopper  cars  (140,000  pounds'  capacity),  at  12,800 

600  refi-lscrator  cars  (80,000  pounds'  capacity),  at  $4,095 

60  mikado  locomotives,  estimated  to  cost  $84,000 

Total  equipment 


Of  this  cost  the  applicant  is  prepared  to  contribute  at  once  in  cash 
and  material,  approximately  $979,300,  and  will  finance  throu^  the 
National  Railway  Service  Corporation  $7,800,000,  leaving  the  amount 
desired  as  a  loan  from  the  United  SUtes,  $5,200,000. 

eoLaa 


LOAK  TO  BALnuOBS  *  < 


AdaitlMiU  y«fl  tmckt  ud  ridlnsB 421,907 

SlgnslB  and  iDterlocklsK  and  Ulepbone  train  dispatdilnx- SOS,  69S 

SbopB,  mBcWneij,  etc 821,836 

Bridges,  treaties,  and  cnlTerta 4,075,463 

Increawd  w«l|lit  of  rail,  etc 670,340 

TvtKl  addltlona  and  bettennenta 6,086,746 

Of  Hub  coet  tiae  applicant  is  to  finance  $8,036,746,  and  ihio  amount 

desired  as  a  loan  from  the  United  States  is  $8,000,000. 
The  total  amount  to  be  taken  care  of  b;  applicant  is  $11,816,046,  and 

the  total  amount  desired  asaloan  from  the  United  States  i8$8,200,000. 

4.  The  present  and  prospective  ability  of  tht  applicant  to  repay 
the  loan  and  to  meet  its  obligations  in  regard  thereto. 

5.  That  the  character  of  the  security  offered  in  respect  of  equip* 
ment  is  the  direct  obligation  of  tiie  National  Bailway  Service  Cor- 
poration  and  a  second  lien  on  the  equipment  and  in  respect  of  addi- 
tions and  betterments  is  $5,000,000,  par  ralue,  of  applicant's  refund- 
ing and  general  mortgage  series-A  5  per  cent  bonds,  due  1995,  and 
in  addition  thereto  $100,000,  par  value,  of  United  States  liberty 
loan  bonds  and  victory  notes. 

6.  He  extent  to  which  the  public  convenience  and  necessity  will 
be  served  is  that  the  loan  will  enable  it  to  acquire  l/XK)  box  cars, 
2,200  hopper  cars,  600  refrigerator  cars,  and  50  locomotives,  and  to 
ocouplete  and  render  fully  useful  additions  and  betterments  now 
under  way  and  upon  which  largo  sums  have  already  been  expended. 

The  application  was  accompanied  by  such  fads  and  details  as  the 
Commission  required  with  respect  to  the  physical  situation,  owner- 
E^ip,  capitalization,  indebtedness,  contract  obligations,  operation, 
and  earning  power  of  tbt  applicant,  wit^  such  other  facts  relating 
to  the  propriety  and  expediency  of  granting  the  loan  applied  for  and 
the  ability  of  the  applicant  to  make  good  the  obligation  as  the  Com- 
mission deemed  pertinent  to  the  inquiry. 

The  Association  of  Railway  Executives  recommended  a  loan  to  the 
applicant  of  $3,087,000  for  additions  and  betterments  to  existing 
equipment,  and  a  loan  of  $5,000,000  for  additions  and  betterments  to 
promote  the  movement  of  freight-train  cars. 

In  respect  to  the  loan  applied  for  to  aid  the  applicant  in  providing 
itself  with  frra^t-train  equipment,  the  Commission  is  of  the  opinion 
that  conaderation  thereof  should  be  deferred  until  the  car-trust 
indenture,  under  the  provisions  of  which  the  applicant  proposes  to 
acquire  the  equipment  is  submitted  to  the  Commission  for  approval, 
and  the  Commission  bo  finds. 

Tho  Commission  finds  further  that  the  making  of  a  loan  of 
$3,000,000  by  the  United  States  to  the  applicant  for  the  purpose  of 

6Si.aa 


236  INTEBSTATB  OOHUBBOB  OOlOCSStOir  IXPOBtS. 

aiding  it  in  making  additions  and  betterments  to  way  and  struotnns 
to  promote  the  movement  of  freight-train  cars  is  necessary  to  enable 
the  applicant  properly  to  meet  the  transportation  needs  of  the  pub- 
lic; that  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  afford  reasonable  assur- 
ance of  the  applicant's  ability  to  repay  the  loan  within  the  time  fixed 
therefor,  and  to  meet  its  oUier  obligations  in  connection  with  such 
loan,  and  afford  reasonable  protection  to  the  United  States;  and  that 
the  applicant  is  unable  to  provide  itself  from  other  sources  with  the 
funds  necessary  for  the  above-mentioned  purposes. 
An  appropriate  certificate  will  he  issued. 


Certificate  No.  S7fora  Loan  wider  Section  BIO  of  the  Tremtportation 
Acty  19^0,  as  Amended. 
The  Interstate  Commerce  Commission  certifies  to  the  Secretary  of 
the  Treasury  its  findings: 

1.  That  the  making  of  a  loan  of  $3,000,000  by  the  United  States 
to  the  Baltimore  &  Ohio  Kailroad  Company,  herunafter  referred  to 
as  the  applicant,  for  the  purpose  of  aiding  the  applicant  in  provid- 
ing it^lf  with  additions  and  betterments,  is  necessary  to  enable  the 
applicant  properly  to  meet  the  transportation  needs  of  the  public. 

2.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  funiish 
reasonable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor  and  to  meet  its  other  obligations  in 
connection  with  such  loan. 

3.  That  the  amount  of  the  loan  which  is  to  he  made  is  $3^000,000. 

4.  That  the  time  from  the  making  thereof,  within  which  the  loan 
is  to  be  repaid  in  full,  is  15  years. 

5.  That  the  terms  and  conditions  of  the  loan,  including  the  secur- 
ity to  be  given  for  repayment,  are  as  follows: 

(a)  The  loan  shall  he  secured  by  the  pledge  of  (1)  the  Baltimore 
&  Ohio  Railroad  Company  refunding  and  general  mortgage  series-A 
6  per  cent  bond  No.  B-46,  for  $5,000,000.  This  bond  is  roistered 
in  the  name  of  the  Baltimore  &  Ohio  Railroad  Company,  and  at- 
tached thereto  is  the  bond  power  executed  in  blank;  and  (2)  United 
States  government  victory  loan,  4]  per  cent  gold  notes  for  $100,000. 
These  notes  are  in  denomination  of  $10,000  eac^,  and  are  munbered 
A-14466  to  A-14470,  inclusive,  and  A-14567  to  A-14571,  inclusive, 
and  attached  thereto  are  the  coupons  due  December  15, 1920,  and  sub- 
sequently.   Said  bonds  are  payable  to  bearer. 

(b)  The  applicant  may  repay  all  or  ai^.part  of  the  loan  before 
maturity.  The  collateral  security  shall  be  proportionately  released 
as  parts  of  the  loan  are  repaid. 

6i.aa 


,,  CcHH^Tc 


IiOAlr  TO  BALTTHOBK  A  OHIO  It.  B.  237 

(c)  The  applicant  shall,  on  demand  of  the  Secretary  of  the  Treas- 
ury, with  the  concurrence  of  the  Interstate  Commerce  Commission, 
deposit  with  the  Secretary  of  the  Treasury  such  additional  security 
u  may  be  from  time  to  time  required.  The  securities  pledged, 
together  with  any  that  may  he  pledged  hereafter  or  may  have  been 
pledged  heretofore,  as  secarity  for  this  loan  or  any  other  obligation 
of  the  said  applicant  to  the  United  States  for  loans  under  section  210 
of  the  transportation  act,  1920,  as  amended,  shall  be  applicable  in 
like  manner  to  secure  the  payment  of  any  and  all  such  loans. 

(d)  The  applicant  has  agreed  in  an  instrument  in  writing  dated 
the  1st  day  of  October,  1920,  filed  with  the  Interstate  Commerce 
Cominission,  to  ^e  following  conditions:  (1)  That  the  amount  to  be 
financed  by  it  in  connection  with  the  loan  for  additions  and  better- 
ments to  way  and  structure  shall  be  so  financed  that  the  cost  to  it 
of  any  loans  secured  from  sources  other  than  the  United  States 
goTemment  shall  not  exceed  7  per  cent  per  annum,  including  in  such 
cost  discounts,  attorneys'  fees,  and  pay  and  all  other  expenses  in 
connection  therewith;  (3)  the  expenditures  made  from  the  loan 
for  additions  and  betterments  shall  be  confined  to  such  expenditures 
•s  may  be  chargeable  to  accounts  for  inrestmoit  in  road  and  equip- 
ment provided  in  the  Commission's  accounting  classification  of  steam 
roads  in  efiect  at  the  time  the  expenditures  may  be  made;  (8)  the 
applicant  shall  furnish  the  Commission,  on  or  aitout  January  1  and 
July  1, 1921,  the  detailed  certificate,  under  oath  of  its  chief  engineer, 
lowing  t!ie  character  and  costs  of  the  additions  and  betterments 
made  with  or  in  connection  with  this  loan  for  said  purposes.  The 
loan  toT  additions  and  betterments  shall  have  been  expended  or 
definitely  obligated  for  the  purposes  for  whicJi  loaned,  or  shall  be 
npaid  to  the  United  States,  on  or  before  July  1, 1921.  In  event  the 
CommiBsi<»i  ^all  certify  to  the  Secretary  of  the  Treasury  that  the 
appUcuit  has  failed  or  refused  well  and  truly  to  comply  with  any 
me  or  mon  of  the  terms  and  conditions  contained  in  this  agreement, 
the  whole  or  any  part  of  the  obligation  evidencing  the  loan  as  tJie 
Commission  may  designate,  shall,  at  the  option  of  the  holder,  bec<»B« 
due  and  payable. 

6.  That  t^e  prospective  earning  power  of  the  applicant,  together 
with  the  AtxadXT  and  value  of  the  securi^  offered  furnish,  in  the 
opinion  of  the  CommissioD,  reasonable  assurance  of  the  t^plioaat's 
Polity  to  repay  the  loan  wijbin  the  time  fixed  therefor,  and  reason- 
able protection  to  the  United  States. 

7.  That  the  applicaid,  in  the  opinion  of  the  Commianon,  is  unable 
to  provide  itself  •with,  the  funds  necessary  {Or  the  aforesaid  purposes. 

Done  in  Washington^  D.  (X,  this  Ist  day  of  Qotobra,  1920. 

«i.aa 


D,=;,lz...,C00gIC 


nTTEBSTATE  COUUERCE   C0UUIS5I0N  BEPOETS. 


FiNAKOB  DocKja-  No.  48. 
IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  CHI- 
CAGO, ROCK  ISLAND  &  PACIFIC  RAILWAY  COMPANY 
FOR  AUTHORITY  TO  ISSUE  GENERAL  -  MORTGAGE 
BONDS  AND  FIRST  AND  REFUNDING  MORTGAGE 
BONDS.  

Buimitted  September  £8,  1960,    Decided  October  f,  19t9. 


Aathority  granted:  (1)  To  isane  and  pledge  $1,000,000  of  genenil-n 

gold  bonds  of  1088,  Ktid  (2)  to  iasue  $1,DOOJX>0  of  tint  and  retundliig  mort- 
gage gold  bonds,  to  be  beld  In  the  treasaiy  of  tlie  applicant 

it.  L.  BeU  and  W.  F.  Peier  for  applicant 

Repobt  akd  Obdeh  or  the  Coumission. 
DiTiBioN  4,  CoMHissoNXBS  Metes,  Daniis^,  Eastican,  and  Pottek. 
Bt  Division  4 : 

It  appearing,  That  the  Chicago,  Rock  Island  &  Pacific  RailiCRy 
Company,  a  common  carrier  by  railroad  engaged  in  interstate  com- 
merce, has  made  application  to  this  Commission  under  section  SOs 
of  the  interstate  commerce  act  for  authority  (1)  to  issue  $1,OOOJ)00 
of  general-mortgage  gold  bonds  of  1988,  under  a  certain  motigmge, 
and  to  pledge  said  bonds  with  the  Central  Union  Trust  Company  of 
New  York,  pursuant  to  the  terms  of  the  applicant's  first  and  refund- 
ing gold-bond  mortgage  dated  April  1,  1904,  in  connection  with  the 
issue  of  a  like  amount  of  its  first  and  refunding  mortgage  gold  bonds ; 
and  (2)  to  issue  $1,000,000  of  first  and  refunding  gold  bonds  under 
said  first  and  refunding  gold-bond  mortgage  of  April  1,  1904,  said 
bonds  to  be  held  in  the  treasury  of  the  applicant,  it  being  proposed 
to  use  the  same  as  collateral  security  for  such  short-term  loans  as  the 
applicant  may  find  it  necessary  to  make  from  time  to  time  until  the 
market  for  said  bonds  improves ;  and 

It  further  appearing,  That  said  application  was  made  in  such  form 
and  contained  such  matters  as  the  Commission  prescribed,  and 
that  it  was  made  under  oath,  ngned,  and  filed  on  behalf  of  sud 
carrier  by  one  of  its  executive  officers  having  knowledge  of  the 
matters  therein  set  forth  and  duly  designated  for  that  pnipose  hj 
the  carrier ;  and 

It  further  appearmg,  That  notice  of  the  filing  of  said  application 
has  been  given  to,  and  a  copy  thereof  filed  with,  each  of  the  gov- 
ernors of  the  states  of  Illinois,  Iowa,  Arkansas,  Colorado,  Kansas, 
Louisiana,  Minnesota,  Mississippi,  Missouri,  Nebraska,  New  Mexico, 


BOHDB  OF  OHIOAOO,  BOOK  ISLUn)  *  PAOinC  ST.  239 

Oklahoma,  South  Dakota,  Tennessee,  and  Texas,  the  only  stated  in 
which  said  carrier  operates,  and  that  do  objection  to  Uie  issuance 
by  this  Conuniesion  of  an  order  granting  Uie  application  has  been 
offered  by  the  railroad,  public  service,  or  utilities  commission,  or 
other  appropriate  authority  of  any  of  said  states  j  and 

It  further  appearing,  That  the  application  has  been  duly  heard 
and  submitted,  and  that  full  investigation  of  the  matters  and  things 
involved  in  this  proceeding  has  been  had: 

Bsld,  That  the  proposed  issnes  of  said  bonds  by  the  Chicago, 
Rock  Island  &  Psoific  Railway  Company  (a)  are  for  a  lawful 
object  within  its  corporate  purposes  and  compatible  with  the  public 
interest,  which  is  necessary  and  appropriate  for  and  consistent  with 
the  proper  performance  by  it  of  service  to  the  public  as  a  common 
carrier,  and  which  will  not  impair  its  ability  to  perform  that 
service;  and  {b)  are  reasonably  necessary  and  appropriate  for  such 
purpose. 

/t  u  therefore  ordered,  That  the  Chicago,  Rock  Island  &  Pacific 
Railway  Company  be,  and  it  is  hereby,  authorized  (1)  to  issue,  as 
of  the  date  of  January  1, 1898,  $1,000,000  of  general-mortgage  gold 
bonds  of  19S8;  said  bonds  to  be  issued  under  and  pursuant  to,  and ' 
to  be  secured  by,  the  general  gold-bond  mortgage  dated  January  1, 
1898,  made  by  the  applicant  to  the  Central  Trust  Company  of  New 
York  and  George  Sherman,  .under  which  the  Bankers  Trust  Com- 
pany and  Frank  N.  B.  Close  are  now  successor  tnistees,  an  attested 
copy  of  which  is  on  file  with  the  application;  said  bonds  to  be 
registrable  as  provided  in  said  general  gold-bond  mortgage,  to  bear 
interest  at  the  rate  of  4  per  cent  per  annum,  payable  semiannually, 
on  the  1st  day  of  January  and  July  in  each  year,  and  the  principal 
of  such  bonds  to  be  payable  January  1,  1988;  and  (2)  to  pledge 
these  bonds  with  the  Central  Union  Trust  Company  of  New  York, 
trustee,  in  accordance  with  the  terms  of  the  applicant's  first  and  re- 
funding gold-bond  mortgage  of  April  1,  1904,  made  by  the  appli- 
cant to  the  Central  Trust  Company  of  New  York  (now  known  as 
the  Central  Union  Trust  Company  of  New  York)  and  David  R. 
Francis,  an  attested  copy  of  which  is  also  on  file  with  the  applica- 
tion, as  part  security  for  the  $1,000,000  of  first  and  refunding 
mortgage  gold  bonds,  the  issue  of  which  is  hereinafter  authorized, 
said  general-mortgage  gold  bonds  of  1988  to  be  in  the  form  sub- 
mitted with  the  application  and  to  be  used  solely  as  such  security 
until  otherwise  ordered  by  this  Commission. 

It  M  further  ordered.  That  the  Chicago,  Bock  Island  &  Pacific 
Railway  Company  be,  and  it  is  hereby,  authorized  to  issue,  as  of  the 
date  of  April  1, 1904,  $1,000,000  of  first  and  refunding  mortgage  gold 
bonds;  such  bonds  t*  be  issued  under  and  pursuant  to,  and  to  be 

65I.C.a 


240  IHTBRSTATR  OOKKBBCns  OOKinSSIOlT  BEPOETB. 

secured  by,  the  Htst  mad  nfnnding  gold-bond  mort^^kge  of  April  1, 
1904;  the  bonds  to  be  subject  to  redemption  and  to  be  rogistrsble  ts 
provided  in  said  first  and  refunding  gold-bond  mortgage,  to  bear 
interest  at  the  rate  of  4  per  cent  per  annum,  payable  saniannually, 
on  the  1st  day  of  April  and  October  in  each  year,  the  principal  of 
said  bonds  to  be  payable  April  1, 1934;  said  bonds  to  be  in  the  form 
submitted  with  the  application,  and  to  be  held  in  tho  treasury  of  the 
applicant,  the  Chicago,  Koek  Island  &  Pacific  Railway  Company, 
and  not  to  be  used,  sold,  pledged,  or  otherwise  disposed  of  except  as 
may  be  authorized  by  future  order  of  this  Conunission, 

It  is  further  ordered.  That  the  said  general-mortgage  gcdd  bonds  of 
1988  and  the  said  first  and  refunding  mortgage  gold  bonds  shall  not 
be  used  for  any  purposes  other  than  those  specified  in  the  application; 
and  that  the  applicant  shall  make  report  to  this  Commission  of  the 
pledge  of  said  general-mortgage  gold  bonds  of  1988  with  the  Central 
Union  Trust  Company  of  New  York,  trustee,  within  10  days  aft«r 
the  same  shall  have  been  so  pledged,  and  that  said  applicant  ^all 
make  report  to  this  Commission  of  the  release  of  said  bonds  from 
such  pledge  within  10  days  after  the  same  shall  have  been  so  released. 

And  it  is  further  ordered.  That  nothing  herein  shall  be  constnwd 
to  imply  any  guaran^  or  oUigation  on  the  part  of  the  United 
States  as  to  the  payment  of  principal  or  interest  m  any  or  all  of  the 
bonds  of  either  of  said  issues. 

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LOAN  TO  OHIOAOO  GREAT  WESTERN   tt.  R. 


Finance  Docket  No.  941. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE 
CHICAGO  GREAT  WESTERN  RAILROAD  COMPANY 
FOR  A  LOAN  FROM  THE  UNITED  STATES  TO  AID  IN 
PROVIDING  NEW  EQUIPMENT  AND  OTHER  ADDI- 
TIONS AND  BETTERMENTS. 


Svbmitled  Bepiember  tS,  19iO.    Decided  October  i,  19S0. 


Upon  HUpplemental  application,  former  flndlngs  modified  and  loan  of  $276,000 
for  tlie  pnrcbase  of  locomotives  cerdfled.  Oettlflcate  of  September  10, 1920, 
cwKded. 

S.  li.  FeUon,  for  applicant. 

SUFPLEHENTAL  RePOBT  OF  THE  COMMISSION. 

Division  4,  Couhibsionebs  Meter,  Daniels,  Eastman,  and  Potter. 
Bt  Division  4; 

The  Chicago  Great  Western  Railroad  Company,  a  carrier  by  rail- 
road, subject  to  the  interstate  commerce  act,  hereinafter  referred  to 
as  the  applicant,  on  May  13,  1920,  made  application  to  the  Interstate 
Commerce  Commission  for  a  loan  from  the  United  States  in  accord- 
ance with  section  210  of  the  transportation  act,  1920,  as  amended, 
and  on  June  23,  1920,  the  applicant  amended  and  supplemented  the 
application.  On  September  28,  1920,  the  applicant  further  amended 
the  application  by  withdrawing  its  request  for  a  loan  for  the  purpose 
of  making  additions  and  betterments  to  way  and  structures  and 
equipment. 

In  the  application,  as  now  amended  and  supplemented,  the  appli- 
cant sets  forth ; 

1.  That  the  amount  of  the  loan  desired  is  $276,000. 

2.  That  the  term  for  which  the  loan  is  desired  is  15  years. 

3.  That  the  purpose  of  the  loan  and  the  use  to  which  it  will  be 
applied  are  as  follows :  Purchase  of  10  new  freight  locomotives,  total 
estimated  cost,  $552,000,  loan  requested,  $276,000. 

4.  The  present  and  prospective  ability  of  the  applicant  to  repay 
the  loan  and  meet  the  requirements  of  its  obligations  in  that  regard. 

5.  That  the  security  offered  is  applicant's  first-mortgage  50-year 
4  per  cent  gold  bonds. 

6.  That  the  extent  to  which  l^e  pnblic  convenience  and  necessity 
will  be  served  by  the  loan  is  that  the  apfdicant  will  be  enabled  to 
handle  traffic  without  delay  and  congestion. 


240  INTEBSTATB  COMICEROB  COHinSSIOV  BBFOSTS. 

secured  by,  the  first  uid  refunding  gold-bond  mortgage  of  April  1, 
1904;  the  bonds  to  be  subject  to  redemption  and  to  be  registrable  as 
provided  in  said  first  and  refunding  gold-bond  mortgage,  to  bear 
interest  at  the  rate  of  4  per  cent  per  annum,  payable  semiannually, 
on  the  1st  day  of  April  and  October  in  each  year,  the  principal  of 
said  bonds  to  be  payable  April  1, 1984;  said  bonds  to  be  in  the  form 
submitted  with  the  application,  and  to  be  held  in  the  treasury  of  the 
applicant,  the  Chicago,  Kock  Island  &  Pacific  Railway  Company, 
and  not  to  be  used,  sold,  pledged,  or  otherwise  disposed  of  except  as 
may  be  authorized  by  future  order  of  this  Commission. 

It  is  fwther  ordaredf  That  the  said  general-mortgage  gold  bcmds  of 
1988  and  the  said  first  and  refunding  mortgage  gold  bonds  shall  not 
be  used  for  any  purposes  other  than  those  specified  in  the  application; 
and  that  the  applicant  shall  make  report  to  this  Commission  of  the 
pledge  of  said  general-mortgage  gold  bonds  of  1988  with  the  Central 
Union  Trust  Company  of  New  York,  trustee,  within  10  days  after 
the  same  shall  have  been  so  pledged,  and  that  said  applicant  shall 
make  report  to  this  Ctmunusion  of  the  release  of  said  bonds  fnmi 
such  pledge  within  10  days  after  the  same  shidl  have  been  so  released. 

And  it  it  further  ordered.  That  notliing  herein  shall  be  construed 
to  imply  any  guaranty  or  oUigation  on  the  part  of  the  United 
States  as  to  the  payment  of  principal  or  interest  (m  any  or  all  of  the 
bonds  of  either  of  said  issues. 

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LOAB  10  OmOAOO  QBBAT  WESIEBN  R.  R. 


FiNAWCB  DOCBBT  Wo.  941. 

IN  THE  MATTER  OF  THE  APPUCATION  OF  THE 
CHICAGO  GREAT  WESTERN  RAILROAD  COMPANY 
FOR  A  LOAN  FROM  THE  UNITED  STATES  TO  AID  IN 
PROVIDING  NEW  EQUIPMENT  AND  OTHER  ADDI- 
TIONS AND  BETTERMENTS. 


Bubmittetl  September  t8,  19t0.    Deckted  October  4,  IStO. 


Upon  eapplementBl  appllcatton,  former  Sndtngs  modified  and  loan  of  |276,000 
for  the  pnrcham  of  locomotlTes  certified.    Oertlflcate  of  September  10, 1920, 


5.  Sf,  Felton,  for  applicant. 

Supplemental  Repobt  of  the  Commibsion. 
Division  4,  CoMHisfnoNEHS  Meteb,  Danxeia,  Eastman,  and  Potter. 
Br  DmsiON  4 : 

The  Chicago  Great  Western  Railroad  Company,  a  carrier  by  rail- 
road, subject  to  the  interstate  commerce  act,  hereinafter  referred  to 
as  the  applicant,  on  May  13, 1920,  made  application  to  the  Interstate 
Commerce  Commission  for  a  loan  from  the  Umt«d  States  in  accord- 
ance with  section  210  of  the  transportation  act,  1920,  as  amended, 
and  on  June  23,  1920,  the  applicant  amended  and  supplemented  the 
application.  On  September  28,  1920,  the  applicant  further  amended 
the  application  by  withdrawing  its  request  for  a  loan  for  the  purpose 
of  making  additions  and  betterments  to  way  and  structures  and 
equipment. 

In  the  application,  as  now  amended  and  supplemented,  the  appli- 
cant sets  forth: 

1.  That  the  amount  of  the  loan  desired  is  $276,000. 

2.  That  the  term  for  which  the  loan  is  desired  is  15  years. 

3.  That  the  purpose  of  the  loan  and  the  use  to  which  it  wilt  be 
applied  are  as  follows:  Purchase  of  10  new  freight  locomotives,  total 
estimated  cost,  $552,000,  loan  requested,  $276,000. 

4.  The  present  and  prospective  ability  of  the  applicant  to  repay 
the  loan  and  meet  the  requirements  of  its  obligations  in  that  regard. 

6.  That  the  security  offered  is  applicant's  first-mortgage  50-year 
4  per  cent  gold  bonds. 

6.  That  the  extent  to  which  the  public  convenience  and  necessity 
will  be  served  by  the  loan  is  that  the  applicant  will  be  enabled  to 
handle  traffic  without  delay  and  congestion. 


242  nTTEBSTATB  COHHBBOE  COMMISSION  REPORTS. 

The  application  was  accompanied  by  such  facts  and  details  as  the 
Commission  required  with  respect  to  the  physical  situation,  owner- 
ship, capitalization,  indebtedness,  contract  obligations,  operation,  and 
earning  power  of  the  applicant,  together  with  such  other  facts  re- 
lating to  the  propriety  and  expediency  of  granting  the  loan  applied 
for  and  the  ability  of  the  applicant  to  make  good  the  obligation,  as 
the  Commission  deemed  pertinent  to  the  inquiry. 

The  Association  of  Railway  Executives  recommended  the  making 
of  a  loan  of  $276,000  to  the  applicant  to  aid  it  in  purchasing  freight- 
train  locomotives. 

After  investigation,  the  Commission  finds  that  the  making  of  a 
loan  of  $276,000  by  the  United  States  to  the  applicant,  to  enable  it 
to  provide  itself  with  equipment  consisting  of  10  new  heavy  freight 
locomotives  at  an  estimated  total  cost  of  $552,000,  is  necessary  in 
order  to  enable  the  applicant  properly  to  meet  the  transportation 
needs  of  the  public ;  that  the  prospective  earning  power  of  the  appli- 
cant, and  the  character  and  value  of  the  security  offered,  afford  rea- 
sonable assurance  of  the  applicant's  ability  to  repay  the  loan  within 
the  time  fixed  therefor,  and  to  meet  its  other  obligations  in  connection 
with  such  loan,  and  reasonable  protection  to  the  United  States;  and 
that  the  applicant  is  unable  to  provide  itself  from  other  sources  with 
funds  necessary  for  the  aforesaid  purposes. 

An  appropriate  certificate  will  be  issued,  and  amended  certificate 
No.  17,  September  10, 1920,  will  be  canceled. 


Second  Amended  Certificate  No.  17  for  a  Loan  under  Section  SIO  of 
the  Transportation  Act,  J9S0,  aa  Amended. 

The  Interstate  Commerce  Conunission  further  certifies  to  the  Sec- 
retary  of  the  Treasury  its  findings : 

1.  That  the  making  of  a  loan  of  $276,000  by  the  United  States  to 
the  Chicago  Great  Western  Kailroad  Company,  hereinafter  refemd 
to  as  the  applicant,  for  the  purpose  of  enabling  it  to  provide  itself 
with  equipment,  is  necessary  to  enable  the  applicant  properly  to 
meet  the  transportation  needs  of  the  public. 

2.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  furnish 
reasonable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor  and  to  meet  its  other  obligations  in 
connection  with  such  loan. 

3.  That  the  amount  of  the  loan  which  shall  be  made  is  $276,000. 

4.  That  the  time  from  the  making  thereof  within  which  tlie  loan 
shall  be  repaid  in  full  is  16  yeart. 

esLca 


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IA>AN  TO  CHIGAOO  QBBAI  WBSTEBN  B.  B.  243 

5.  That  the  terms  and  conditions  of  the  loan  including  the  aecnrity 
to  be  given  for  repayment  are: 

(a)  The  loan  shall  be  collaterally  secured  by  the  pledge  of  Chicago 
Gnat  Western  Railroad  Company  first-mortgage  50-year  4  per  cent 
gold  bonds,  due  September  1,  1959,  in  denomination  of  $1,000  each, 
numbered  from  270O9  to  27560,  incluslTe,  and  with  a  total  face  vidue 
of  $5^,000.  Said  bands  are  issued  under  an  indenture  of  mortgage, 
dated  September  1,  1909,  executed  by  the  applicant  to  the  Standard 
Trost  Company  of  New  York,  trustee. 

{h)  The  applicant  may  repay  all  or  any  part  of  the  loan  before 
matarity.  The  collateral  security  shall  be  released  proportionately 
IS  parta  of  the  loan  are  repaid. 

(c)  The  applicant  shall,  on  demand  of  the  Secretary  of  the  Treas- 
tuy,  with  the  concurrence  of  the  Interstate  Conunerce  Commission, 
deposit  with  the  Secretary  of  the  Treasury  such  additional  security 
as  may  be  from  time  to  time  required.  The  securities  pledged,  to- 
gether with  any  that  may  be  pledged  hereafter,  or  may  have  been 
pledged  heretofore,  as  securi^  for  this  loan  or  any  other  obligation 
of  the  said  applicant  to  the  United  States  for  loans  under  section 
210  of  the  transportation  act,  19£0,  as  amended,  ^lall  be  applicable 
in  libe  manner  to  secure  the  payment  of  any  and  all  such  loans. 

(d)  The  applicant  has  agreed  in  an  instrument  in  writing,  dated 
the  5tb  day  of  October,  1920,  filed  with  the  Interstate  Commerce 
CMnmisaiop,  to  the  following  conditions:  That  the  amount  to  be 
financed  by  it  in  connection  with  the  loan  shall  be  so  financed  tliat 
the  cost  to  it  of  any  loans  secured  from  sources  other  than  the  United 
States  gOTemment  shall  not  exceed  7^  per  cent  per  annum,  including 
in  such  cost  discount,  attorneys' feee,  and  any  atui  all  other  expuises  in 
connection  therewith.  In  the  event  that  the  Commission  shall  cer- 
^fy  to  the  Secretary  of  the  Treasury  that  the  applicant  has  failed 
or  refosed  well  and  truly  to  comply-  with  the  terms  and  conditions 
contained  in  said  agreement,  the  whole  or  any  part  of  the  obligations 
evidencing  the  loan  as  tlie  Commission  may  designate,  shall,  at  the 
option  of  the  holder,  become  due  and  payable. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  famish,  in  the 
opinion  of  the  Commisaon,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor,  and  reason- 
able protection  to  the  United  States. 

7.  That  the  applicant,  in  tiie  opinbn  of  the  Commission,  is  unable 
to  provide  itself  from  other  sources  with  the  funds  necessary  for  the 
aforesaid  purpose. 

Amended  certificate  No.  17,  September  10, 1920,  is  hereby  canceled. 
Done  in  Washington,  D.  C,  this  7th  day  of  October,  1920. 
86LaO. 


INTEB8TATE  COMUEBOE  COUHISSION  BEFOETS. 


FiNANCB  Docket  No.  985. 

IN  THE  MATTER  OF  THE  SUPPLEMENTAL  APPLICA- 
TION  OF  THE  MAINE  CENTRAL  RAILROAD  COMPANY 
FOE  A  LOAN  FROM  THE  UNITED  STATES  TO  MEET 
MATURING  INDEBTEDNESS. 


Submitted  September  t9,  19t0.    Decided  October  i,  19tO. 


AppUcetton  granted  and  a  loan  ol  (1,000,000  approTed, 

Morria  McDonald,  for  applicant. 

Repobt  of  the  CoHHtasioM. 
DineioN  4,  Comuissiohxbs  Meter,  Daniels,  Eastman,  and  Pottbr. 
Br  Division  4: 

The  Maine  Central  Railroad  Company,  a  carrier  by  railroad  sub- 
ject to  the  interstate  comnteroe  act,  hereinafter  referred  to  as  the  ap> 
plicant,  on  May  27,  1920,  made  application  to  the  Interstate  Com> 
merce  Commission  for  a  loan  £rom  the  United  States  in  accordance 
with  section  210  of  the  transportation  act,  and  on  June  26  and 
August  9,  1920,  the  applicant  amended  and  suppleioented  the  ap- 
plication. 

The  said  application,  as  amended  and  supplemented,  iras  made  in 
the  nkanner  required  by  paragraph  (a)  of  section  210  of  tiie  transp<M> 
tation  act,  1920,  as  amended,  and  was  accompanied  by  such  facts  and 
detttils  as  the  Commission  required  and  deemed  pertinent  to  the  in- 
quiry. 

In  response  to  the  said  application,  as  amended  and  supplemented, 
the  Commission,  on  October  9, 1920,  by  its  certificate  No.  29,  certified 
to  the  Secretary  of  the  Treasury  its  approval  of  a  loui  to  the  ap- 
plicant of  $653,000  to  aid  the  applicant  in  providing  itself  with 
equipment  and  additions  and  betterments  to  existing  equipment  and 
way  and  structures,  to  prtonote  the  movement  of  cars. 

On  September  29, 1920,  the  applicant  further  supplemented  its  ap- 
plication, and  set  forth : 

1.  That  the  amount  of  additional  loan  desired  is  $1,000^000. 

2.  That  the  term  for  which  the  additional  loui  is  desired  is  15 
yeara. 

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LOAN  10  UAVSa  CBNTRAI.  B.  B.  246 

3.  That  the  purpose  of  the  additional  Loan  and  Uie  use  to  Trhidi  it 
will  be  applied  are  to  meet  the  maturing  indebtedness  of  $1,300,000, 
represented  bj  Poiobscot  Shore  Line  Railroad  Oompan;  mortga^  4 
per  cent  bonds,  dated  August  1, 1S90,  maturing  August  1, 1Q20. 

4.  That  the  security  offered  is  applicant's  first  and  refunding 
mortgage  6  per  cent  gold  bonds,  series  D,  due  December  1,  193ft. 

The  supplemental  applicatitm  was  accompanied  by  such  facts  and 
details  as  the  Commission  required  and  deemed  pertinent  to  the  in- 
quiry. 

After  investigation,  the  Commission  finds  that  the  making  of 
so  addititoial  loan  by  the  United  States  of  $1,000,000  to  the  appli- 
cant to  aid  it  in  meeting  its  maturing  indebtedness,  as  hereinbe- 
fore set  forth,  is  necessary  in  order  to  enable  the  applicant  propeiiy 
to  meet  the  transportation  needs  of  the  public ;  that  the  prospective 
earning  power  of  the  applicant,  end  character  and  value  of  the  se- 
curity offered,  afford  reasonable  assurance  of  the  applicant's  ability 
to  repay  the  loan  within  the  time  fixed  thtfefor,  and  to  meet  its  other 
obligations  in  connection  with  such  loan,  and  reasonable  protection 
to  the  United  States;  and  that  the  applicant  is  unable  to  provide 
itaelf  with  funds  necessary  for  aforesaid  purposes  from  other  sources. 

An  appropriate  certificate  will  be  issued. 


Certificate  No.  SO  for  a  Loan  under  SecHon  &10  of  the  Transportation 
Act,  19eOy  as  Amejided. 

The  Interstate  Commerce  Commission  certifies  to  the  Secretary 
of  the  Treasury  its  findings: 

1.  Tliat  the  making  of  an  additional  loan  of  $1,000,000  by  the 
tjnil«d  States  to  the  Maine  Central  Railroad  Company,  hereinafter 
referred  to  as  the  applicant,  for  the  purpose  of  aiding  the  applicant 
in  meeting  its  maturing  indebtedness  is  necessary  to  enable  the  ap- 
phcant  properly  to  meet  the  transportation  needs  of  the  public. 

2.  'I'hat  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  furnish 
K:i-wnab]e  assurance  of  the  applicant's  ability  to  repay  the  loan 
witliin  the  time  fixed  therefor,  and  to  meet  its  other  obligations  in 
connection  with  such  loan. 

3.  That  the  amount  of  the  loan  which  is  to  be  made  is  $1,000,000. 

4.  I'hat  the  time  from  the  making  thereof,  within  which  the  loan 
sliall  be  repaid  in  full,  is  15  years. 

fi.  That  the  terms  and  conditions  of  the  loan,  including  the  secur- 
ity to  be  given  for  repayment,  are: 

ULca 


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246  INTERSTATE  OOMMBBCE  COUMISSIOIT  &EFOBTS. 

(a)  The  loan  shall  be  secured  by  the  pledge  of  $1^50,000  of  ap- 
plicant's first  and  refunding  mortgage  6  per  cent  gold  bonds,  series 
Df  due  December  1,  1935,  in  coupon  form  and  numbered  16818  to 
18067,  inclusive,  in  denomination  of  $1,000.  The  bonds  were  issued 
under  the  first  and  refunding  mortgage  securing  20-year  gold  bonds 
of  the  Maine  Central  Railroad  Company  to  the  Union  Safe  Deposit 
A,  Trust  Company,  of  Portland,  Me.,  trustee,  dated  December  1, 1915. 

(5)  The  applicant  may  pay  all  or  any  part  of  the  loan  before 
maturity.  The  collateral  security  shall  be  released  proportionately 
as  parts  of  the  loan  are  paid. 

{c)  That  the  applicant  shall,  on  demand  of  the  Secretary  of  the 
Treasury,  with  the  concurrence  of  the  Iiit«rstat«  Commerce  Commis- 
sion, deposit  with  the  Secretary  of  the  Treasury  such  additional  se- 
curity as  may  be  from  time  to  time  required;  the  securities  pledged, 
togetiier  with  any  that  may  be  pledged  hereafter  or  may  have  been 
pledged  heretofore  as  security  for  this  loan  or  any  other  obligation 
of  the  said  applicant  to  the  Umt«d  Sta^  for  loans  made  under  sec- 
tion 210  of  the  transportation  act,  1920,  shall  be  applicable  in  like 
manner  to  secure  the  payment  of  any  and  all  such  loans. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish  in  the 
opinion  of  the  Commission  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor,  and  reason- 
able protection  to  the  United  States. 

7.  That  the  applicant  in  the  opinion  of  the  Commission  is  unable 
to  provide  itself  with  the  funds  necessary  for  the  aforesaid  purposes 
from  other  sources. 

Done  in  Washington,  D.  C,  this  9th  day  of  October,  1920. 

65 1.  C.  C. 


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UAN  TO  LOMO  ISLAKD  B.  B. 


Finance  Docket  No.  980. 


IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  LONG 
ISLAND  RAILROAD  COMPANY  FOR  A  LOAN  FROM  THE 
UNITED  STATES  TO  AID  IN  PROVIDING  EQUIPMENT 
AND  OTHER  ADDITIONS  AND  BETTERMENTS. 


Bvbmitted  Bepiember  tO,  1920.    Decided  Oetoh^  i,  IStO. 


Application  granted  la  part  and  a  Iosd  of  $719,000  approred. 

R(Uph  Peters,  for  applicant 

Refobt  of  the  Cohuibsion. 
Division  4,  Cohmissioners  Metek,  Daniei^,  Eabtuan,  and  Potteb. 
By  Division  4 : 

The  Long  Island  Railroad  Company,  a  carrier  by  railroad  subject 
to  the  interstate  commerce  act,  hereinaft«r  referred  to  as  the  appli- 
cant, on  June  6,  1920,  made  application  to  the  Interstate  Commerce 
Commission  for  a  loan  from  the  United  States  in  accordance  with 
section  210  of  the  transportation  act,  1920,  ns  amended,  to  provide 
itself  with  equipment  and  additions  and  betterments  to  way  and 
structures,  and  on  June  18,  1920,  the  applicant  amended  the  appli- 
cation. 

In  the  application,  as  amended,  the  applicant  sets  forth. 

1.  That  the  amount  of  the  loan  desired  is  $937,000. 

2.  That  the  term  for  which  the  loan  is  desired  is  16  years. 

3.  That  the  purposes  of  the  loan  and  the  uses  to  which  it  will  be 
applied  are  to  provide  funds  for  the  purchase  of  new  equipment  and 
the  making  of  additions  and  betterments  to  way  and  structures  as 
follows : 

Equipment:  Six  freight  locomotives  and  four  Bwitchiag  locotnotlveB, 

at  843,700  each -' . WS7. 000 

Additions  and  betterments  to  way  and  structures 500, 000 

Total 887,000 

4.  Its  present  and  prospective  ability  to  repay  the  loan  and  to 
meet  its  obligations  in  regard  thereto. 

ssi.G.a 


D,„iz...,CoogIc 


248 


INTERSTATE  OOMHBECffi  OOHMISSION  BEFOBTS. 


6.  That  the  security  offered  is:  As  to  the  loan  for  equipment, 
equipment-trust  certificates  in  an  amount  equal  to  the  amount  of  the 
loanj  as  to  the  loan  for  additions  and  betterments,  applicant's  notes 
indorsed  by  the  Pennsylvania  Railroad  Company. 

6.  That  the  extent  to  ivhich  the  public  convenience  and  necessity 
will  he  served  is  that  the  equipment  and  additions  and  betterments 
to  be  acquired  from  the  proceeds  of  the  loan  will  result  in  a  more 
expeditious  handling  of  traffic,  thereby  avoiding  delays  and  conges-' 
tion  due  to  inadequate  facilities. 

The  application  was  accompanied  by  such  facts  and  details  as  the 
Commission  required  with  respect  to  the  physical  situation,  owner-f 
ship,  capitalization,  indebtedness,  contract  obligations,  operation,  and 
earning  power  of  the  applicant,  together  with  such  facts  relating  to 
the  propriety  and  expediency  of  granting  the  loan  applied  for,  and 
the  ability  of  the  applicant  to  make  good  the  obligation,  as  the  Com- 
mission deemed  pertinent  to  the  inquiry. 

The  Association  of  Bailway  Executives  reconmiended  a  loan  to  the 
applicant  of  $218,500  for  the  purchase  of  freight  and  switching  loco- 
motives and  $500,000  for  additions  and  betterments  to  promote  the 
movement  of  freight-train  cars. 

After  investigation,  the  Commission  finds  that  the  making  in  part 
of  the  proposed  loan  by  the  United  States  for  the  purposes  and  in' 
the  amounts  hereinbelow  set  forth: 


Porposa. 

"•S" 

FtDBDCOd 

StaM. 

S137,0C» 

soo.oot. 

t3U,000 

«SW,000 

"SSISaS""""--: :•:■•■■ 

BST.OOO 

aw,ooo 

' 

is  necessary  to  enable  the  applicant  properly  to  meet  the  transporta- 
tion needs  of  the  public;  that  the  prospective  earning  power  of  the 
applicant,  together  with  the  character  and  value  of  the  security 
offered,  afford  reasonable  assurance  of  the  applicant's  ability  to  re- 
pay the  loan  within  the  time  fixed  therefor  and  to  meet  its  other 
obligations  in  connection  with  such  loan,  and  reasonable  protection 
to  the  United  States;  and  that  the  applicant  is  unable  to  provide 
itself  with  funds  necessary  for  the  aforesaid  purposes  from  other 


An  appropriate  certificate  will  be  issued. 


Digilzed  by  Google 


LOAS  TO  LONG  ISLAITD  B.  B.  249 

C«rii^oaXe  No.  3^  for  a  Loan  wider  Seation  glO  of  the  TransportaHon 
Act,  1S&),  aa  Amended. 

The  Interstate  Commerce  CommiBaon  cotifiee  to  the  Secretary  of 
the  Treasniy  its  findings : 

1.  That  the  making  of  a  loan  of  $719^  by  the  United  States  to 
the  Long  Island  Bailroad  Company,  hereinafter  referred  to  as  the 
applicant,  for  the  purpose  of  aiding  the  applicant  in  providing  itself 
with  equipment  and  in  making  additions  and  betterments  to  way  and 
structures  is  necessary  to  enable  Uie  applicant  properly  to  meet  the 
transportation  needs  of  the  public. 

2.  That  the  prospective  earning  power  of  the  applicant,  together 
irith  the  character  and  value  of  the  security  offered,  afford  reasonable 
assurance  of  the  applicant's  ability  to  repay  the  loan  within  the  time 
fixed  therefor,  and  to  meet  its  other  obligations  in  connection  with 
such  loan. 

3.  That  the  amount  of  the  loan  which  is  to  be  made  is  $719,000. 

4.  That  the  time  from  the  making  thereof  within  which  the  loan  is 
to  be  repaid  in  full  is  10  years. 

5.  That  the  terms  and  conditions  of  the  loan,  including  the  security 
to  be  given  for  repayment,  are  as  follows : 

(a)  The  loan  shall  be  repaid  in  10  equal  annual  installments  of 
$71^900  each,  maturing  consecutively  in  1  to  10  years  from  the  date  of 
the  loan,  and  shall  be  secured  as  to  both  principal  and  interest  by  the 
unrestricted  ^aranty  and  indorsement  of  the  Pennsylvania  Railroad 
Company. 

(b)  The  applicant  may  pay  all  or  any  part  of  the  loan  before 
maturity. 

(e)  The  applicant  shall,  on  demand  of  the  Secretary  of  the  Treas- 
ury, with  the  concurrence  of  the  Interstate  Commerce  Commission, 
deposit  with  the  Secretary  of  the  Treasury  such  additional  security 
as  may  be  from  time  to  time  required.  The  security  pledged,  together 
with  any  that  may  be  pledged  hereafter,  or  may  have  been  pledged 
heretofore,  as  security  for  this  loan  or  any  other  obligation  of  the 
applicant  to  the  United  States  for  loans  under  section  210  of  the 
transportation  act,  1920,  as  amended,  shall  be  applicable  in  like  man- 
ner to  secure  the  payment  of  any  and  all  such  loans. 

(d)  The  applicant  has  agreed  in  an  instrument  in  writing,  dated 
the  27th  day  of  September,  1920,  filed  with  the  Interstate  Com- 
merce Commission,  to  the  following  conditions:  (1)  That  the 
amount  to  be  financed  by  it  in  connection  with  the  loan  shall  be 
so  financed  that  the  cost  to  it  of  any  loans  secured  from  sources 
other  than  the  United  States  government  shall  not  exceed  7^  per 
cent  per  annum,  including  in  such  cost,  discounts,  attorneys'  fees, 
«nd  any  and  all  o^er  expenses  in  connection  therewith;  (2)  the 

85I.C.& 


250  INTBRSTAXB  OOUHEBOB  COMUIS8I0N  BBFOBTS. 

expenditures  made  from  the  loan  for  additions  and  bettennenta 
shall  be  confined  to  each  expenditures  aa  may  be  chargeable  to 
accounts  for  invesbnent  in  road  and  equipment  pronded  in  the 
Commission's  accounting  classification  for  steam  roads  in  effect  at 
the  time  the  expenditures  may  be  made;  and  (3)  the  applicant 
shall  furnish  the  Commission  on  or  about  January  1  and  July  1, 
1921,  the  detailed  certificate  under  oath  of  its  chief  engineer,  show- 
ing the  character  and  costs  of  the  additions  and  betterments  made 
with  or  in  connection  with  this  loan  for  said  purposes.  The  loan 
for  additions  and  betterments  shall  have  been  expended  or  definitely 
obligated  for  the  purposes  for  which  loaned,  or  shall  be  repaid 
to  the  United  States,  on  or  before  Jul;  1,  1921.  In  event  the  Com- 
mission shall  certify  to  the  Secretary  of  the  Treasury  that  the 
applicant  has  failed  or  refused  well  and  truly  to  comply  with  any 
one  or  more  of  the  terms  and  conditions  contained  in  said  agree- 
ment, the  whole  or  any  part  of  the  obligations  evidencing  the  loan 
as  the  Commission  may  designate,  shall,  at  the  option  of  the  holder, 
become  due  and  payable. 

6.  That  the  prospective  earning  power  of  the  applicant,  togetiier 
with  the  character  and  value  of  the  security  offered,  furnish,  in  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  Bxed  therefor,  and  reason- 
able protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  un- 
able to  provide  itself  with  the  funds  necessary  for  the  aforesaid 
purposes  from  other  sources. 

Done  in  Washington,  0.  C,  this  12th  day  of  October,  1920. 

65  I.  c.  a 


D,=;,lz...,C00gIC 


LOAK  TO  CABOLmA,  CLINCHFIELD  A  OHIO  BT. 


Finance  Docket  No.  931. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  CARO- 
LINA, CLINCHFIELD  &  OHIO  RAILWAY  FOE  A  LOAN 
FROM  THE  UNITED  STATES  TO  MEET  MATURING 
OBLIGATIONS  AND  TO  PROVIDE  EQUIPMENT  AND 
OTHER  ADDITIONS  AND  BETTEl  .lENTS. 


Submitted  September  28,  ISSO.    Decidei  October  6,  I9S0. 


DpoD  snpplemental  application,  addlUoual  loan  of  $1,000,000  approved. 
/.  McQwUkin  and  Edviturd  G.  BaUly  for  applicant. 

SUPPLBKBNTAL  RePORT  OP  THE  CoHHISSION. 

Division  4,  Cohhissionebs  Meteb,  Daniels,  and  Eabtuan. 
Bt  Division  4: 

B;  our  certificate  No.  4  of  June  26,  1920,  and  supplement  tliereto 
dated  July  1, 1920,  we  certified  a  loan  of  $2,000,000  to  the  Carolina, 
Clinchfield  &  Ohio  Railway,  hereinafter  referred  to  as  the  applicant, 
under  section  210  of  the  transportation  act,  1920,  as  amended,  to 
enable  it  to  meet  maturing  indebtedness  and  thereby  properly  to 
serve  the  public  during  the  transition  period  immediately  following 
the  termination  of  federal  controL 

In  its  supplemental  application  of  June  17,  1920,  upon  which  the 
loan  was  made,  the  applicant  stated  that  the  maturities  which  it  must 
immediately  prepare  itself  to  take  care  of  consisted  of  ^,000,000  of 
10-jear  notes  maturing  July  1,  1920 ;  $1,300,000  of  Elkhorn  Exten- 
sion first-mortgage  5  per  cent  notes,  the  payment  of  which  was  ex- 
tended until  January  1, 1922,  on  condition  that  applicant  place  them 
with  another  holder  not  later  than  July  1,  1920^  and  the  short-time 
notes  and  acceptances  in  the  amount  of  $4,124,000  referred  to  in  an 
original  application  dated  May  28,  1920,  making  an  aggregate  of 
upwards  of  $7,000,000. 

Among  the  terms  and  conditions  of  the  loan  of  $2,000,000  it  was 
provided  that  the  applicant  itself  should  finance  and  meet,  among 
other  things,  (a)  $1,300,000  of  Elkhora  Extension  first-mortgage  5 
per  cent  notes,  the  payment  of  which  was  extended  until  January 

esi.ac. 


Digiized  by  Google 


262  intebstatb  ooumbbob  commission  BEPORTS. 

1, 1932,  on  condition,  as  stated  in  the  application,  that  applicant  place 
them  with  another  holder  not  later  than  July  1,  1920;  and  (&) 
short-term  notes  and  acceptances  in  the  amount  of  $4,124,000,  which 
were  the  short-term  notes  and  acceptances  mentioned  above  as  re- 
ferred to  in  the  application  of  May  28,  1920,  by  the  issue  and  sale  to 
its  shareholders  or  others  of  its  income  debentures  in  an  amount  not 
less  than  $5,000,000  (out  of  an  authorized  issue  of  $6,000,000),  bear- 
ing not  more  than  6  per  cent  per  annum  interest  and  sold  at  not  less 
thRn  par,  the  undertaking  of  the  applicant  in  this  regard  to  be  under- 
written by  a  responsible  banking  house,  which  should  agree  to  dis- 
pose of  or  purchase  these  debentures  at  par  and  at  not  exceeding  6 
per  cent  per  annum  interest,  and  without  other  coat  to  the  applicant, 
as  floating  indebtedness  and  other  obligations  should  mature  or 
become  due. 

The  loan  of  $2,000,000  was  used  by  applicant  to  discharge  the 
$2,000,000  of  lO-year  notes  maturing  July  1,  1920.  The  applicant 
desired  to  provide  for  the  $1,300,000  of  Elkhorn  Extension  first- 
mortgage  5  per  cent  notes  by  placing  them  with  another  holder 
instead  of  through  the  sale  of  its  income  debentures ;  and  it  was  con- 
templated that  the  $4,124,000  of  short-term  notes  and  acceptances,  as 
well  as  equipment- trust  and  other  obligations,  should  be  met  as  they 
matured  or  became  due  by  the  sale  at  par,  under  the  underwriting 
agreement  above  referred  to.  of  the  6  per  cent  income  debentures  in 
the  amount  of  not  less  than  $5,000,000. 

In  the  negotiations  leading  to  the  making  of  the  loan  of  $2,000,000 
there  was  considered  a  tentative  provision  looking  toward  the  issue 
and  underwriting  of  the  full  $6,000,000  of  debentures  instead  of  the 
amount  of  $5,000,000  finally  incorporated  in  the  conditions  and  agree- 
ment. The  change  to  $5,000,000  waa  made  in  view  of  the  undertak- 
ing and  desire  of  the  applicant  to  Bnanco  in  other  ways  the  $1,300,000 
of  Elkhorn  Extension  first-mortgage  5  per  cent  notes,  the  payment 
of  which  had  been  extended  to  July  1,  1922,  but  which  applicant 
was  required  to  place  with  another  holder  not  later  than  July  1, 
1920. 

Applicant  now  says  that  it  has  made  every  effort  to  dispose  of  the 
$1,800,000  of  5  per  cent  Elkhorn  first-mortgage  gold  notes  until  their 
maturity,  but  has  only  succeeded  in  postponing  until  October  1, 1920, 
as  to  $1,000,000  thereof  (now  held  by  the  Bankers  Trust  Company 
of  New  York  Gity),  and  until  April  29,  1921,  as  to  $300,000  thereof 
(now  held  by  the  Equitable  Trust  Company  of  New  York),  the 
time  when  applicant  must  procure  a  new  purchaser  or  take  up  the 
notes,  and  that  applicant  has  been  unable  to  induce  the  holder  of  the 
$1,000,000  of  these  notes  due  October  1,  1920,  to  carry  the  same  for 
any  further  period,  and  after  negotiating  with  a  number  of  banks 

6SI.G.a 


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LOAIT  TO  CABOLINA,  CLINCHFIELD  A  OHIO  BT.  253 

and  financiBl  institations  in  the  city  of  "Sew  York  for  the  parpoee 
of  inducing  them  to  purchase  the  notes,  the  applicant  is  of  the  opin- 
ion that  it  is  exceedingly  improhable  that  anyone  can  be  induced  to 
purchase  the  same  except  on  prohibitive  tenns.  As  reasons  for  its 
inability  to  finance  its  requirements  in  this  respect,  applicant  ad- 
vances the  following:  (a)  The  present  condition  generally  of  the 
money  market;  (&)  the  current  interest  rates  for  short-time  financ- 
ing which,  if  the  necessary  financial  assistance  could  be  obtained  in 
this  instance,  would  be  at  the  rate,  as  stated  by  applicant,  of  from 
12  to  16  per  cent  per  annum;  (c)  the  notes  in  question  are  extended 
not«s  and  are  not  listed  on  any  of  the  public  exchanges,  the  market 
therefore  is  inactive  and  quotations  are  far  below  the  intrinsic  value 
of  the  notes;  (d)  the  notes  would  have  to  be  sold,  if  a  market  could 
be  made  for  the  amount  in  question,  at  prices  even  lower  than  present 
quotations;  (e)  stockholders  of  the  company  in  undertaking  to  pur- 
chase at  par  $5,000,000  of  unsecured  6  per  cent  15-year  income 
debentures  of  the  company  have  reached  the  limit  of  their  present " 
financial  ability  to  meet  the  situation. 

Applicant  acknowledges  its  responsibility  under  the  conditions  and 
agreement  in  respect  of  the  $2,000,000  loan  to  place  the  Elkhom 
notes  with  another  purchaser,  and  states  that  if  the  Commission  in- 
sists it  will  carry  out  this  undertaking,  even  at  the  burdensome  rates 
of  interest,  from  12  to  16  per  cent,  which  it  must  pay.  We  are  of  the 
opinion  that  it  is  not  in  the  public  interest  to  require  applicant  to 
assume  this  burden,  but  that  it  should  be  made  a  loan  for  such  period 
of  time,  which  we  determine  to  be  one  year,  as  may  enable  it  to  place 
those  notes  upon  more  favorable  terms. 

From  our  investigation  of  the  present  application  it  appears  that 
although  arrangements  have  been  initiated  for  the  sale  of  the 
$5,000,000  of  unsecured  6  per  cent  15-year  income  debentures,  to  be 
taken  by  the  stockholders  of  the  company,  none  of  these  debentures 
has  actually  been  issued  and  no  part  of  the  proceeds  of  these  deben- 
tures has  come  into  the  treasury  of  applicant,  and  applicant's  short- 
time  notes  and  acceptances,  as  shown  by  its  own  accounts,  have  not 
been  paid  off  and  canceled  as  they  matured  or  became  due,  but  have 
actually  increased  in  amount  to  the  extent  of  $200,000,  amounting, 
as  shown  by  statement  furnished  by  applicant's  president  on  Septem- 
ber 24,  1920,  to  $4,324,000.  This  is  explained  by  applicant  as  due 
to  necessary  time  required  in  the  formation  of  the  syndicate  and  to 
the  fact  that  payments  by  the  syndicate,  organized  to  purchase  the 
$5,000,000  of  debentures,  are  made  in  installments,  not  all  of  which 
have  become  due,  and  it  is  further  explained  that  the  syndicate  has 
taken  care  of  notes  and  acceptances  in  the  total  principal  amount  of 
$3,500,000,  some  of  which  are  past  due  and  some  of  which  have  not 

601.  ac. 


254  INTERSTATE   COMHEBCE   COMUISSIOIT  BBP0BT8. 

jet  matured.  Two  of  the  compaDj's  notes,  iggngaiiag  $624,000, 
have  not  be«n  taken  up  by  the  syndicate,  although  they  are  past 
due,  and  are  carried  on  demand.  Notes  to  the  amount  of  $1,050,000, 
which  have  been  taken  up  by  the  syndicate  and  which  matured  in 
June,  July,  and  August,  1920,  were  renewed  or  extended.  Appli- 
cant has  not  filed  with  the  Commissidn  its  application  under  section 
20a  of  the  interstate  commerce  act  for  authority  to  issue  the  6  per 
cent  debentures  in  the  total  principal  amount  of  $6,000,000,  of  which 
a  total  amount  of  $5,000,000  is  to  be  taken  by  the  syndicate  of  stock- 
holders for  the  liquidation  of  short-term  indebtedness. 

The  payment,  as  they  matured  or  became  due,  of  these  short-time 
notes  and  acceptance  in  the  aggregate  of  $4,124,000  was  one  of  the 
principal  conditions  of  the  loan  of  $2,000,000.  It  is  our  opinion 
Uiat  application  for  authority  to  issue  the  debentures  should  be 
-made  immediately  and  that  the  entire  purchase  price  of  the 
$6,000,000  of  debentures  to  be  taken  by  the  stockholders  should  be 
paid  into  the  treasury  of  the  company  and  applied  to  meeting  the 
short-term  obligations  and  acceptances  in  the  amount  of  $4,124,000, 
aboTO  referred  to,  and  such  other  current  obligations  as  may  be  met 
by  the  remainder  of  $876,000,  all  before  January  1,  1921,  and  such 
action  will  be  made  a  condition  of  the  further  loan  of  $1,000,000 
which  we  shall  now  certify. 

The  present  application  is  supplemental  to  previous  applications 
for  loans  under  section  210  of  the  transportation  act,  1920,  made  by 
this  applicant  for  the  purpose  of  enabling  it  to  meet  its  maturing 
indebtedness.  Applicant  has  set  forth  in  its  several  applications 
amounts  of  the  loans,  the  terms  for  which  the  loans  were  desired, 
the  purposes  of  the  loans,  and  the  uses  to  which  they  would  be  ap- 
plied, the  present  and  prospective  ability  of  the  applicant  to  repay 
the  loans  and  meet  the  requirements  of  its  obligations  in  that  regard, 
the  character  and  value  of  the  security  offered,  and  the  extent  to 
which  the  public  convenience  and  necessity  will  be  served.  The 
applications  were  accompanied  by  statements  showing  such  facts  in 
detail  as  the  Commission  required  with  respect  to  the  physical 
situation,  ownership,  capitalization,  indebtedness,  contract  obliga- 
tions, operation,  and  earning  power  of  the  applicant,  together  with 
such  other  facts  relating  to  the  propriety  and  expediency  of  grant- 
ing the  loan  applied  for,  and  the  ability  of  the  applicant  to  make 
good  the  obligation,  as  the  Commission  deemed  pertinent  to  the 
inquiry. 

Applicant  offers  as  security  for  Uie  present  loan  the  deposit  with 
the  Secretary  of  the  Treasury,  in  addition  to  the  securities  already 
on  deposit  with  him  for  previous  loan  of  $2,000,000,  the  following : 
(1)  $l,000p00  of  5  per  cent  Elkhom  first-mortgage  gold  notes  of 

65i.aa 

r  :,tzedbyG00gIe 


LOAN  TO  OABOUNA,  dJNCHFIBLD  *  OHIO  BT.  255 

the  appliamt  dated  February  1,  1917,  iasued  under  and  secured  by 
mortgage  from  the  ^pUcant  to  the  New  York  Trust  Company,  as 
trustee,  dated  Februai^  1,  1917,  being  part  of  an  authorized  issue 
of  $6,000,000  of  said  notes,  all  of  which  are  outstanding  and  have 
been  extended  to  January  1,  1922,  with  interest  at  the  rate  of  C 
per  cent  per  annum,  by  a  supplemental  indenture  between  the  appli- 
cant and  the  New  York  Tmst  Company,  as  trustee,  and  the  note 
bolders,  dated  December  15,  1919;  this  mortgage  a  first  lien  upon 
the  line  of  the  applicant  from  Dante,  Va.,  to  Elkhom  City,  Ky., 
comprising  approximately  34.d8  miles;  and  (2)  $500,000  (now 
pledged  with  the  Bankers  Trust  Company  to  secure  applicant's 
obligation  maturing  October  1,  1920)  of  first-mortgage  5  per  cent 
30-year  gold  bonds  of  applicant  dated  June  1,  1908,  and  June  1, 
1938,  isaued  under  and  secured  by  a  mortgage  from  the  applicant 
to  the  Fanners  Loan  &  Trust  Company,  dated  June  1,  1908,  which 
are  part  of  an  authorized  issue  of  $16,000,000  of  said  notes,  of 
which  $14,850,000  are  now  outstanding;  this  mortgage  a  first  lien 
on  the  line  of  the  applicant  from  Dante,  Va.,  to  North  Carolina- 
South  Carolina  state  line,  comprising  approximately  223.47  miles, 
subject  to  the  prior  lien  of  the  Lick  Creek  &  Lake  Erie  Railroad 
mortgage  for  $200,000  on  about  7  miles  between  Dante  and  Fink, 
Va,,  and  on  $3,000,000  (entire  issue),  of  first-mortgage  bonds  of  the 
Carolina,  Clinchfield  &  Ohio  Railway  of  South  Carolina,  constitute 
ing  a  first  lien  on  about  18  miles  of  line  in  South  Carolina. 

We  are  of  opinion  that  the  character  and  value  of  the  security 
offered,  in  connection  with  the  prospective  earning  power  of  the 
applicant,  afford  reasonable  assurance  of  applicant's  ability  to  repay 
the  loan  and  meet  its  other  obligations  in  connection  therewith. 

After  informal  hearings  and  investigation  we  accordingly  find 
that  the  making  of  the  further  propo^d  loan  of  $1,000,000  by  the 
United  States  for  the  purpose  of  enabling  applicant  to  meet  its 
maturing  indebtedness  is  necessary  to  enable  the  applicant  properly 
to  meet  the  transportation  needs  of  the  public,  and  that  the  pros- 
pective earning  power  of  the  applicant  and  the  character  and  value 
of  the  security  offered  are  such  as  to  furnish  reasonable  assurance  of 
the  applicant's  ability  to  repay  the  loan  within  the  time  fixed  there- 
for and  to  meet  its  other  obligations  in  connection  with  such  loan. 

We  further  find  that  the  loan  should  be  made  in  the  amount  of 
$1,000,000,  and  that  the  time  from  the  making  thereof  within  which 
it  is  to  be  repaid  is  one  year,  wiA  the  option  to  applicant  of  repay- 
ment at  any  time  before  maturity. 

We  further  find  that  the  security  to  be  given  for  repayment  is 
that  offered  by  the  applicant  as  hereinabove  set  forth ;  that  the 
prospective  earning  power  of  the  applicant,  together  with  the  char- 
es i.e.  0. 

D,=;,lz...,C00gIC 


256  nnrBRSTATE  oohhsbob  oouhibsioit 

acter  and  value  of  the  securi^  offered,  famish  in  our  opinicHi  rea- 
sonable assurance  of  the  applicant's  ability  to  repay  the  loan  within 
the  time  fixed  therefor,  and  reasonable  protection  to  the  United 
States;  and  that  the  applicant  is  nnable  to  provide  itself  with  the 
funds  necessary  for  the  aforesaid  purposes  from  other  sources. 

We  further  find  that  it  shall  be  a  condition  of  the  loan  that  appli- 
cant undertake  to  issue  and  sell  the  $5,000,000  of  income  debentures 
hereinabove  referred  to,  and  collect  into  its  treasury  in  cash  the 
par  value  thereof,  and  with  the  proceeds  of  such  sales  pay  off,  dis- 
charge, and  cancel  the  ahort-time  obligations  and  acceptances  in  the 
amount  of  $4,124,000  above  referred  to,  and  such  other  current  in- 
debtedness as  may  be  met  by  the  remainder  of  $876,000  of  the  pro- 
ceeds of  such  sale,  all  before  January  1, 1921 ;  and  that  in  the  event  of 
the  failure  of  applicant  faithfully  to  perform  all  or  any  part  of  this 
condition,  the  amount  of  the  loan  and  the  obligations  representing 
the  same  shall,  upon  certificate  of  such  fact  by  tiie  Interstate  Com- 
merce Commission,  become  immediately  due  and  payable. 

An  appropriate  certificate  will  be  issued. 


Certificate  No.  £8  for  a  Loan  under  Section  SIO  of  the  Transportation 
Act,  19X0,  as  Ametided. 
The  Interstate  Commerce  Commission  certifies  to  the  Secretary 
of  the  Treasury  its  findings: 

1.  That  the  making  of  a  loan  of  $1,000,000  by  the  United  States  to 
the  Carolina,  Clinchfield  &  Ohio  Railway,  hereinafter  referred  to 
as  the  applicant,  for  the  purpose  of  enabling  it  to  meet  in  part  its 
maturing  indebtedness  consisting  of  $1,300,000,  principal  amount, 
of  6  per  cent  Elkhom  Extension  first-mortgage  gold  notes,  the 
payment  of  which  was  extended  until  January  1,  1922,  on  condition 
that  applicant  place  them  with  imotber  holder  not  later  than  July 
1,  1920,  is  necessary  to  enable  the  applicant  properly  to  meet  the 
transportation  needs  of  the  public. 

2.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  furnish 
reasonable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  tlierefor,  and  to  meet  its  other  obligations  in 
connection  with  such  loan. 

3.  That  the  amount  of  the  loan  which  is  to  be  made  is  $1,000,000. 

4.  That  the  time  from  the  making  thereof  within  which  the  loan 
is  to  be  repaid  in  full  is  one  year. 

5.  That  the  terms  and  conditions  of  the  loan  including  the  secur- 
ity to  be  given  for  repayment,  are : 

(a)  The  loan  shidl  be  collaterally  secured  by  the  pledge  of 
(1)  $1,000,000  of  6  per  cent  Elkhom  first-mortgage  gold  notw  of 


LOAN  TO  CABOLISA^  CUITCHFIELD  A  OHIO  'ST.  25? 

the  applicant  dated  Frttmary  1,  1917,  ismed  nnder  and  eecored  by 
mortgage  from  the  appticant  to  the  New  York  TrasC  Cbmpany,  as 
trustee,  dated  February  1,  1917,  being  part  of  an  authorized  issue  of 
$6,000,000  of  said  notes,  all  of  which  ate  eutstandiiig  and  have  been 
extended  to  January  1,  1923,  with  interest  at  Uie  rate  of  6  per  cent 
per  annum,  by  a  supplemental  induiture  between  ^e  applicant 
and  the  New  York  Trust  Company,  as  trustee,  and  (iie  note  holders, 
dated  December  15,  1919 ;  and  (2)  $500,000,  principal  amount  (now 
pledged  with  the  Bankers  Trust  Company  to  secure  applicant's  obli- 
gation maturing  October  1,  1920),  of  first-mortgage  5  per  cent  30- 
year  gold  bonds  of  applicant  dated  June  1,  1908,  and  due  June  1, 
1938,  issued  under  and  secured  by  a  mortgage  from  the  applicant  to 
the  Farmers  Loan  &  Trust  Company,  dated  Jane  1, 1908,  which  are 
part  of  an  authorized  issue  of  $16,000,000,  principal  amount,  of  said 
notes,  of  which  $14,850,000,  principal  unount,  are  now  (Hitstsnding. 

(b)  The  applicant  may  repay  all  or  any  part  of  t^e  loan  before 
maturity.  Tlie  collateral  eecurity  shall  be  released  proportionately 
as  parts  of  the  loan  are  repaid. 

(c)  The  applicant  shall  on  demand  of  the  Secretary  of  the  Treas- 
ury, with  the  concurrence  of  the  Interstate  Commerce  Commisraon, 
deposit  with  the  Secretary  of  the  Treasury  such  additional  security 
as  may  be  from  time  to  time  required.  The  securities  pledged,  to- 
gether with  any  that  may  be  pledged  hereafter  or  may  have  been 
pledged  heretofore,  as  security  for  this  loan  or  any  other  obligation 
of  tjie  said  applicant  to  the  United  States  for  loans  under  section  210 
of  the  transportation  act,  1920,  as  amended,  AbU  be  applicable  in  like 
manner  to  secure  the  payment  of  any  and  all  such  loans. 

(d)  The  applicant  has  agreed  in  an  instrument  in  writing,  dated 
the  6Ui  day  of  October,  1920,  filed  with  the  Interstate  Commerce  Com- 
mission, to  the  following  oonditicais :  That  the  applicant  undertake 
to  issae  and  sell  at  par  $5,000,000  of  its  6  per  cent  income  deben- 
tures and  collect  into  its  treasury  in  cash  the  par  valuft  thereof,  uad 
with  the  proceeds  of  such  sale  pay  off,  discharge,  and  cancel  its  short- 
time  obligations  and  acceptances  in  the  amount  of  $1,124,000,  included 
in  a  total  of  $4,%24,000  now  outstanding,  and  waok  other  current  in- 
debtedness as  may  be  met  by  the  remainder,  $676,000,  of  the  proceeds 
of  such  sale,  aU  before  January  1,  1921.  In  event  that  the  Conunis- 
Bi<m  shall  certify  to  the  Secretary  of  the  Treasury  that  the  applicant 
has  failed  or  refused  well  and  truly  to  c<Hnply  with  any  one  or  more  of 
the  tenns  and  conditions  contained  in  said  agreement,  the  whole  or  any 
part  of  the  obligation  evidencing  the  loan  as  the  Commission  may 
designate,  shall  at  the  option  of  the  holder  become  due  and  payable. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  t^e  character  and  value  of  the  security  offered,  famish,  in  the 


d.,  Google 


268  2NTBBSTATB  OOUHEBOB  OOltHISSIOK  BBPOBTS. 

opiniffiD  of  ths  CommiaeioD,  reasonable  BssuraDce  of  the  applicant's 
abilitj  to  repay  ihe  loan  within  the  time  fixed  therefor,  and  reasonable 
protection  to  the  United  States. 

7.  That  t^«  applicant,  in  the  opinion  of  the  CommiBaon,  is  unable 
to  proride  iteelJ  from  othM-  sources  witii  the  funds  necessary  for  tb» 
aiwesaid  purposes. 

Done  in  Washington,  D.  C,  this  eth  day  of  October,  1920. 


Finance  Dockpt  No.  965. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  GREAT 
NORTHERN  RAILWAY  COMPANY  FOR  A  LOAN  FROM 
THE  UNITED  STATES  TO  MEET  MATURING  IN- 
DEBTEDNES8  AND  TO  PROVIDE  EQUIPMENT  AND 
OTHER  ADDITIONS  AND  BETTERMENTS. 


Submitted  October  1.  lOM.    Decided  October  6, 1 


Anthoritj  graated  to  modify  cotlaUra)  security  for  loan  certified  July  28,  IKO; 

£*.  C.  Lindtey  for  applicant 

Sdpplehxntal  Import  of  the  Cohhibsion. 
Division  4,  CoMMtssioNEiis  Metbb,  Danieis,  Eastkan,  and  Pottzb. 
Bt  Divibiow  4 : 

The  Great  Northiem  Railway  Company,  a  carrier  by  railroad  sub- 
ject to  the  interstate  commerce  act,  hereinafter  referred  to  as  the  ap- 
pHeant,  on  May  22,  1920,  mode  application  to  the  Interstate  Com> 
merce  Gommission  for  a  l6an  from  the  United  States,  in  accordance  . 
with  section  310  of  the' transportation  act,  1920,  to  meet  its  maturing 
indebtedness  and  to  provide  itself  with  equipment  and  other  addi- 
tions and  bettffl'ments.  On  June  21,  1920,  the  applicant  supple- 
mented its  application. 

In  response  to  the  aforesaid'  application  and  supplement  thereof, 
the  Commission  on  August  27, 1920,  in  its  amended  certificate  No.  13, 
certified  to  the  Secretary  of  the  Treasury  its  approval  of  the  making 
of  a  ionn  by  th<'  United  States  to  the  applicant  of  $17,910,000,  appor- 
tioned as  follows; 

«5I.C.C. 


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UOAJX  TO  aEBAT  NOBTHBRN  BT.  259 

Tto  iM  In  tho  pnrduM  at  locomotlTcs 12,010,000 

T«  pBj,  In  part  tor  BtTsngtbeoIng  ezlBtlog  equipment  and  for  making 

othM  additions  and  betterments 900, 000 

To  Kid  In  Bwetliis  maturtag  Indebtednen IG,  000, 000 

TottI 17, 910. 000 

In  respect  of  the  loui  to  «id  the  applicuit  in  the  purchase  of 
equipment  (locomotives),  namely  $2,010,000,  the  aforesaid  amended 
certificate  Ko.  18  provides,  among  other  things,  that  the  loan  shall  be 
uauxed — 

by  ttm  [dftdge  of  ajvHcmt'B  eqnlpDMnt  note*  of  car-trnot  certificates  In 
respect  of  nM  equipment,  whlcb  e^nlpfuent  notes  or  car-truBt  certlHcatea 
■ball  be  aecnred  bj  a  MPcond  Uen  on  the  eQulpment,  subordinate  only  to  tbe  flrat 
tten  on  the  said  eqslj^ent  to  secure  the  applicant's  equipment  notes  or  car- 
trast  certlficatea  <for  the  remalndw  •(  the  purchase  price)  to  be  sold  or  ottered 
to  tbe  public.  The  equipm^it  note*  er  car-tmst  certlflcates  pledged  as  col- 
lateral aecurltj'  tor  tbe  loan  trom  tbe  United  States  on  the  eforesBld  eqolpmmt 
■ball  be  secured  bj  tbe  same  equlpinait-tnut  Indeiture  or  agreement  ot  con- 
dltlanal  sale  by  which  tbe  eqnlpmeDt  notee  or  car-trust  certificates  (for  tbe 
remainder  ot  tbe  purchaae  price)  to  be  sold  or  ottered  to  tbe  public  are  secured, 
and  under  irtilcb  title  to  tbe  equipment  shall  not  pass  to  tbe  applicant  nor 
from  the  trustee  for  the  beneflt  ot  tbe  note  btdderg  or  certificate  boldciFB  until 
the  notes  or  cwtitlcates  sbaU  have  been  paid  in  full  and  applicant  shall  have 
falfllled  all  Its  obligations  In  regard  thereto. 

The  aforesaid  amended  certificate  No.  18  provides,  among  other 
things,  afao  that — 

All  ot  said  loans  are  to  be  further  secured  by  the  pledge  as  collateral  se- 
cnrlty  of  a  total  ot  $22,387,000,  par  value,  of  Great  Northern  Railway  Company 
first  and  rounding  mortgage  00-year  4)' per  cant  gold  bonds,  due  ]n1y  1,  J961. 

The  applicant,  by  its  general  counsel,  E.  C.  Lindley,  on  October  1, 
1920,  requested  that  it  be  permitted  to  pledge  $1,812,500,  par  value, 
of  its  first  and  refunding  mortgage  60-year  4J  per  cent  gold  bonds, 
due  July  1, 1961,  as  additional  collat^al  security  for  the  entire  loan 
represented  by  the  aforesaid  amended  certificate  No.  18,  in  lieu  of  the 
applicant's  equipment  notes  secured  by  a  second  lien  on  the  aforesaid 
equipment,  as  provided  in  the  aforesaid  amended  certificate  No.  18. 

After  investigation  and  reconsideratioti,  the  Commission  is  of  the 
opinion  that  the  pledge  of  $1,812,600,  par  value,  of  the  aforesaid 
bonds  in  addition  to  the  $22,387,000  par  value  thereof,  already 
pledged  as  collateral  security  for  the  entire  loan  heretofore  certified 
to  the  Secretary  of  tho  Treasury  in  amended  certificate  No.  13,  of 
August  27,  1920,  in  lieu  of  the  applicant's  equipment  notes  secured 
hy  a  second  lien  on  the  equipment,  as  now  provided  in  said  amended 
certificate  No.  13,  furnishes  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor  and  reasonable 
protection  to  the  United  States,  and  so  finds. 

An  appropriate  second  amended  certificate  No.  13  will  be  issued. 

6SLaa 


d.,  Google 


260  tfTTEBSTATB  COUHBBOB  COMMISSIOir  BEFOBTS. 

Second  Amended  Certificate  No,  IS,  for  a  Loan  wider  Section  tlO  of 
the  Transportation  Act,  I9£0,  as  Amended. 

The  Interstate  Commerce  Commission  further  certifies  to  tiie 
Secretary  of  the  Treasury  its  findings: 

1.  That  amended  certificate  No.  13,  dated  August  27,  1920,  is 
hereby  amended  by  eliminating  therefrom  that  paragraph  reading 
as  follows: 

Tbe  applicant's  notes  eridencioK  tb«  loan  from  the  United  States  on  the 
aforesaid  equipment  shall  bear  Interest,  payable  BMnlanniiaUy.  at  tbs  rate  of 
6  per  cent  per  anaum.  and  shall  be  secured  by  tbe  pledge  of  Applicant's  equip- 
ment notes  or  car-trust  certlflcates  In  respect  of  said  equlpmeDt  which  equip- 
ment notes  or  car-trnst  certlflcates  shall  be  secured  b;  a  second  lien  on  the 
equipment,  subordinate  only  to  the  first  Hen  on  the  sold  equipment,  to  secorg 
the  applicant's  equipment  notes  or  car-trnst  certlflcates  (for  the  remalnilw  of 
the  purchase  price)  to  be  sold  or  offered  to  tbe  pnblla  The  equipment  notes  or 
car-trnst  certlflcstes  pledged  as  collateral  security  for  the  loan  from  tbe  United 
States  on  the  afureeald  eqnlpment  sbaU  be  secnred  by  tbe  same  equtpmeot-trnst 
Indentare  or  agreement  of  conditional  sale  by  which  the  equipment  notes  or  car* 
tmst  certificates  <for  the  remainder  of  the  purchase  price)  to  be  sold  or  aSer«A 
to  the  pobUc  are  secured,  and  under  which  title  to  the  equipment  shall  not  pass 
to  tbe  applicant  nor  from  the  trustee  for  the  benefit  of  the  note  holders  or 
certificate  holders  until  the  notes  or  certificates  diall  have  been  paid  in  fnll, 
and  applicant  shall  have  fulfllled  all  its  obligations  in  regard  tbereto. 

2.  That  said  amended  certificate  No.  13,  of  August  27,  1920,  ie 
hereby  further  amended  by  changing  the  figures  "  22,387,000 "  in 
subdiviaioii  5  thereof  to  read  "  24,199,500  "  so  that  the  sentence  shall 
read  as  follows: 

AU  of  said  loans  are  to  be  further  secured  by  the  pledge  as  collateral  security 
of  a  total  of  $24,109,000  par  value  of  Great  Northern  Railway  Company  first  and 
refunding  mortgage  50-j-ear  4^  per  cent  gold  bonds,  due  July  1,  1861. 

Done  in  Washington,  D.  C,  this  8th  day  of  October,  1920. 

«5i.aa 


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LOAN  TO  CUESAPBAKS  A  OHIO  BX. 


FlNANOB  DOCKBT  No.  936. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  CHESA- 
PEAKE Jfc  OHIO  RAILWAY  COMPANY  FOR  A  LOAN 
FROM  THE  UNrrED  STATES  TO  AID  IN  PROVIDING 
EQUIPMENT  AND  OTHER  ADDITIONS  AND  BETTER- 
MENTS. 


Skbmttted  October  S,  19t0.    DeoUMt  <Mober  10, 19t«. 


Applicatlon  graoted  Id  part  sad  loan  of  $8,TS9,000  approved. 
C.  E.  Oraham  and  A.  C.  Searick  for  applicant. 

BXPORT  or  THX  COMUIBSION. 

DiviuoN  4,  CoMiossioNEKa  MxTEB,  Daj«ieu,  Eastman,  and  Pottbh. 
By  DivisiOK  4: 

The  Chesapeake  St  Ohio  Railway  Company,  a  carrier  by  railroad 
subject  to  the  interstate  conunerce  act,  hereinafter  referred  to  as  the 
applicant,  on  May  29,  1920,  made  application  to  the  Interstate  Com- 
merce Commission  for  a  loan  from  the  UnitAd  States  in  accordance 
witii  MctioD  SIO  of  the  transportation  act,  1920,  to  aid  the  applicant 
in  providing  itself  with  equipment  and  in  making  additions  and  bet- 
terments to  way  and  stmotures.  The  application  was  amended  June 
19,  1920. 

Id  the  applioation,  as  amended,  the  applicant  sets  forth: 

L  That  the  amount  of  the  loan  desired  ia  $18,688,644. 

S.  That  the  term  for  which  the  loan  is  desired  is  15  years. 

8.  "Hiat  the  parpoaes  of  the  loan  and  the  uses  to  which  it  will  be 
applied  are  to  enable  the  applicant  to  provide  it«elf  with  equipment 
and  additions  and  betterments  as  hereinbelow  set  forth : 

t  $90,000 

eadi n.800,000 

6  hMTT  fwltdilDg  locotnotlTea,  at  |6S,500  each 817.600 

l/KM  100-t(m  ateel  coal  can,  at  S0.2OO  each  (leas  estimated  Hav- 
ing on  apeclaltlPS,  J200) 6,000,000 

ToUI  equipment 8, 117, 600 

Total  «4iilpinenC  in  round  Oganm 8,200,000 

Addltlona  end  betterments  to  way  and  Btractnrea,  estimated  to  cost.    6. 88S,  dl4 
Total  requested 13,638,6M 


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262 


INTEBSXATB  OOUUBBGB  00KUIS3I0N  BBTOBTS. 


4.  Ite  present  and  prospective  ability  to  repay  the  loan  and  to  mest 
its  obligations  in  regard  thereto. 

6.  That  the  security  offered  is  applicant's  first-lien  and  improvft- 
ment  mortgage  20-year  5  per  cent  gold  bonds  due  19S0,  and  United 
States  goTermnent  4^  per  cent  fourth  liberty  loan  bonds. 

6.  The  extent  to  which  the  public  convenience  and  neceesi^  will 
be  served  is  that  the  loan  will  enable  the  applicant  to  acqu^v  addi- 
tional equipment  and  other  needed  additions  and  betterments  to  fa- 
cilitate the  movement  of  traffic. 

The  application  was  accompanied  by  such  facts  in  detail  as  the 
Conmiission  required  with  respect  to  tiie  physical  situation,  owner- 
ship, capitalization,  indebtedness,  contract  obligations,  operation,  and 
earning  power  of  the  applicant,  with  such  other  facts  relating  to  the 
propriety  and  expediency  of  granting  the  loan  applied  for  and  the 
ability  of  the  applicant  to  make  good  the  obligation  as  the  Commis- 
sion deemed  pertinent  to  the  inquiry. 

The  Association  of  Railway  Executives  recommended  the  making 
of  a  lOMi  to  the  applicant  of  $1,058,750  for  freight  and  switching 
locomotives,  and  $1,658,750  for  freight-train  cars. 

The  applicant,  on  August  20,  1^0,  requested  deferred  considera- 
tion of  its  application  in  respect  of  additions  and  betterments.  We 
are  of  the  opinion  that  consideration  of  the  making  of  a  loan  for 
additions  and  betterments  should  be  deferred,  and  so  find. 

After  investigation,  we  find  that  the  making  in  part  of  the  pro- 
posed loan  by  the  nnit«d  States  in  the  amount  of  $8,759,000  to  be 
used  in  the  manner  hereinbelow  set  forth : 


Noweqalpmoit. 

Estlm&t«d 

RlHt*! 

s 

nsr.:Mro^3^^£n%i°T"?'™:.^^^^^ 

ln,UT,MI 
l,0(».000 

8,wo,om 

«,«M,000 

J, 701,000 

8,U7,W« 

4.3SS.m 

I,W,000 

is  necessary  to  enable  the  applicant  properly  to  meet  the  transporta> 
tion  needs  of  the  public 

We  further  find  that  the  prospective  earning  power  of  the  appli- 
cant and  the  character  and  value  of  the  security  offered  afford  reason- 
able assurance  of  the  applicant's  ability  to  repay  the  loan  within  the 
time  fixed  therefor,  and  to  meet  its  other  obligations  in  connection 
with  such  loan,  and  afford  reasonable  protecticm  to  the  Unitad 
States,  and  that  the  applicant  Is  unable  to  provide  itself  with  the 
funds  necessary  for  the  above-mentioned  purposes  from  other  sources. 

An  appropriate  certificate  will  be  issued. 

65I.G.a 


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LOAN  TO  OHBS&PKAKK  *  OHIO  BT.  263 

fte  No.  BO  for  a  Loon  undor  SeoHon  SiO  of  the  Trtmaporta- 
tion  Act,  19&). 

interstate  Commerce  CommisBion  oerti0e8  to  the  Secretary 
Creasuiy  its  findings: 

at  the  making  of  a  loan  of  $3,7{[9,00O  b;  the  United  States 
3iesapeake  A  Ohio  Railway  Company,  hereinafter  referred 
le  applicant,  for  the  purpose  of  aiding  the  applicant  in 
ig  itself  with  equipment,  is  necessary  to  enable  the  applicant 
t  to  meet  the  transportation  needs  of  the  public, 
ftt  the  prospective  earning  power  of  the  applicant  and  the 
r  and  value  of  the  security  offered  are  such  as  to  furnish 
>le  assurance  of  the  applicant's  ability  to  repay  the  loan 
;he  time  fixed  therefor,  and  to  meet  its  other  obligations  in 
on  with  such  loan. 

ftt  the  amount  of  the  loan  which  is  to  be  made  is  $3,769,000. 
tX  the  time  from  the  making  thereof  within  which  the  load 
repaid  in  full  is  10  years. 

at  the  terms  and  conditions  of  the  loan,  including  the  security 
^en  for  repayment,  are  as  follows: 

'be  loan  shall  be  coUaterally  secured  by  making  pledge  of 
X>,  principal  amount  of  applicant's  first-lien  and  improve- 
ortgage  20-year  5  per  cent  series-A  gold  bonds,  due  1930, 
mder  an  indenture  of  mortgage  and  deed  of  trust,  dated 
er  1,  1910,  executed  by  the  applicant  to  the  United  States 
re  and  Trust  Company  of  New  York  and  William  H.  White, 
the  same  being  numbered  and  in  denominations  as  follows: 

loud  No.  M $240,000 

tond  No.  106-- 1,226,000 

(ond  No.  107 88,000 

lond  No.  108 1,839,000 

lond  No.  lOe 887,000 

Total 8,760,000 

n  shall  be  farther  collaterally  secured  by  the  pledge  of 
)0,  principal  amount,  of  United  States  government  4^  per 
irtii  liberty  loan  bonds  in  denominations  of  $10,000,  and 
id  as  follows : 

lot.  49S4  to  4636.  inclualve Sbondt. 

JtM.  44210  to  44231,  IndnstTC ZZbonda. 

ion.  73682  to  78608,  Indnrtw 25bonda 

loc  US8C1  to  122800,  Indadra ;. CO  bonds. 

IWal —  lOObmfc 

licant  shall  have  the  right,  provided  authority^  tbenftir  ritall 
;d  first  obtained  from  the  Interstate  Commerce  Commission 
dance  with  law,  to  extend  the  maturity  of  the  said  first-lien 

a 

rK:,iz...,C00gIc 


264  utterstate  oomhbbcb  cohhission  beports. 

and  improTement  mortgage  20-yeur  6  per  cent  gold  bonds  to  a  date 
not  later  than  April  1, 1946,  upon  the  terms  and  otherwise  as  set  forth 
in  section  5  of  article  6  of  the  trust  indenture,  dated  April  1,  1816, 
between  the  applicant  and  the  Central  Trust  Company  of  New  Yoi^ 
(now  Central  Union  Trust  Company  of  New  York),  trustee,  securing 
$40,180,000,  face  amount  of  the  applicant's  6  per  cent  convertible  30- 
year  secured  gold  bonds,  provided  that  at  the  same  time  all  other  of 
said  first-lien  and  improvement  mortgage  bonda  then  issued  and  out- 
standing be  likewise  extended. 

{b)  The  applicant  may  r«paj  ail  or  any  part  of  the  loan  before 
maturity.  The  collateral  security  shall  be  released  proportionately 
as  parts  of  the  loan  are  repaid. 

(c)  The  applicant  shall  on  demand  of  the  Secretary  of  the  Treas- 
ury, with  the  concurrence  of  the  Interstate  Commerce  Commission, 
deposit  with  the  Secretary  of  the  Treasury  such  additional  security 
as  may  be  from  time  to  time  required.  The  securities  pledged,  to- 
gether with  any  that  may  be  pledged  hereafter  or  may  have  been 
pledged  heretofore,  as  security  for  this  loan  or  any  other  obligation 
of  the  said  applicant  to  the  United  States  for  loans  under  section  210 
of  the  transportation  act,  1920,  as  amended,  shaU  be  applicable  in 
like  manner  to  secure  the  repayment  of  any  and  all  such  loans. 

(d)  The  applicant  has  agreed  in  an  instrument  in  writing,  dated 
the  13th  day  of  October,  1920,  filed  with  the  Interstate  Commerce 
Commission,  to  the  following  condition:  That  the  amount  to  be 
financed  by  it  in  connection  with  the  loan  shall  be  so  financed  that 
the  cost  to  it  of  any  loans  secured  from  sources  other  than  the  United 
States  government  shall  not  exceed  7^  per  cent  per  annum,  including 
in  such  cost  discounts,  attorneys'  fees,  and  any  and  all  other  expenses 
in  connection  with  said  loan.  In  event  the  Commission  shall  certify 
to  the  Secretary  of  the  Treasury  that  the  applicant  has  failed  or  re- 
fused well  and  truly  to  comply  with  any  one  or  more  of  the  terms  and 
conditions  contained  in  said  agreement,  the  whole  or  any  part  of  the 
obligations  evidencing  the  loan,  as  the  Commission  may  designate, 
shall,  at  the  option  of  the  holder,  become  due  and  payable. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish,  in  the 
opinion  of  tiie  Commission,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor,  and  reason- 
able protection  to  the  United  States;  and 

7.  That  the  applicant,  in  the  o[Hnion  of  the  Commission,  is  unable 
to  provide  iteelf  with  the  funds  necessary  for  the  aforesaid  purposes 
from  other  sources. 

Done  in  Washington,  D.  C^  this  14th  day  of  December,  1920. 

WLGa 


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LOAN  TO  KAHSAS  OIIX,  UBXICX)  *  OBIEHT  B.  B. 


FiNANOB  Docket  No.  8. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  KAN- 
SAS CITY,  MEXICO  &  ORIENT  RAILROAD  COMPANY, 
ITS  RECEIVER,  AND  THE  KANSAS  CITY,  MEXICO  & 
ORIENT  RAILWAY  COMPANY  OF  TEXAS,  FOR  A  LOAN. 


BulmMted  aeptember  tl,  l»tO.    Decided  October  11, 


Dpoo  Bapplemental  appllcatloii,  and  reconsideration  of  the  record,  origliml  And- 
Ing  modified  and  loan  o(  (2,600,000  to  tbe  receiver  of  tbe  Kaaaae  City, 
Mexico  ft  Orient  Railroad  GomiMiiy  approved. 

Clifford  Histed  imd  Wm.  T.  Kemper  for  applicant. 

SUPPI.EUEMTAI,  Report  of  the  Commibbion. 
Division  4,  Cohhissioners  Metsr,  Dakieu,  Eastkan,  and  PonrrcB. 
Bt  Division  4: 

The  Kansas  Ci^,  Meziro  &  Orient  Railroad  Companr  and  the 
Kansas  City,  Mexico  &  Orient  Railway  Company  of  Texas,  carriers 
by  railroad,  subject  to  the  interstate  commerce  act,  on  May  15, 
1900,  made  joint  application  to  the  Interstate  Commerce  Commis- 
sion for  a  loan  from  the  United  States,  in  accordance  with  section 
210  of  the  transportation  act,  1920,  to  pa;  and  discharge  outstand- 
ing receiver's  certificates  maturing  December  1,  1920,  and  to  meet 
fixed  charges  and  operating  expenses  after  September  1,  1920.  On 
June  4,  1920,  said  carriers  and  William  T.  Kemper,  receiver  of  the 
former,  amended  and  supplemented  the  application. 

In  connection  with  such  application,  a  hearing  was  held  by  the 
Commission  on  June  8, 1920,  and  upon  consideration  of  the  evidence 
and  arguments  there  presented,  and  the  showing  made  in  the  ap- 
plication, the  Commission,  in  report,  July  1,  1920,  aonounced  its 
inability  to  make  the  two  findings  which  are  prerequisites  to  the 
certification  of  a  loan  under  section  210  of  the  transportaHon  act, 
1920,  as  amended: 

(a)  •  •  •  that  the  making  In  wbole  or  in  part  of  the  propoeed  loan  by  the 
United  States  la  necessary  to  enable  the  applicant  properly  to  meet  the  traaa- 
portation  needs  of  tbe  public;  and 

(b)  *  *  *  that  the  proapective  eamlnj;  power  of  the  apidicaot  and  the 
diaracter  and  ralne  of  the  securitr  offered  are  sncb  aa  to  ftuuiah  reaaonabla 
aaanrance  of  tbe  applicant's  ability  to  repay  the  loan  and  to  meet  Its  othw 
obUgatloDs  in  coonectloa  with  sndi  loan. 

Tbe  Commission  on  July  1, 1920,  ordered  that  the  application  be 
denied. 

65  1.0.  a  .t)ogIc 


266  tNTEBSTATB  COUMEBCE  C0UM1S3I0N  BEPORTS. 

On  July  13,  1920,  a  petition  for  reconsideration  of  the  Commis- 
sion's decision  was  filed,  and  the  receiver  of  the  Kansas  City,  Mexico 
&  Orient  Railroad  Company,  on  August  2,  1920,  made  a  further  in- 
formal application  to  the  Commission  for  a  loan  of  $2,500,000,  under 
section  210  of  the  transportation  act,  1920,  as  amended,  with  which 
to  meet  indebtedness  maturing  December  1,  1920. 

It  was  found  in  the  Commisaion's  report  of  July  1,  1920,  that  the 
railroad  system  of  the  Kansas  City,  Mexico  &  Orient  Railroad  Com- 
pany, consisting  of  its  own  lines  and  those  of  its  subsidiary  in  the 
United  States  (the  Kansas  City,  Mexico  &  Orient  Railway  Compuiy 
of  Texas)  is  of  essential  importance  in  meeting  the  transportation 
needs  of  the  public  in  the  territory  which  it  serves. 

It  having  been  made  clear  to  the  Commission  that  the  loan  re- 
quested in  the  amended  application  of  August  2,  1920,  is  necessary 
to  enable  the  receiver  to  continue  the  operation  of  the  railroad  sys- 
tem in  his  charge,  and  thereby  meet  the  transportation  needs  of  a 
large  and  important  section  of  the  United  States,  the  Commission 
informed  the  receiver  by  letter,  August  9,  1920,  that  a  loan  would  ba 
certified  to  the  Secretary  of  the  Treasury  of  $2,500,000  to  meet  re- 
ceiver's certificates  maturing  December  1,  1920,  upon  the  submission 
of  a  supplemental  application  approved  by  order  of  the  court  and 
embodying  the  following  conditions : 

(a)  The  J1,000,000  at  receiver's  certlfleates  in  the  treasury  (of  the  appli- 
cant) sbaU  be  sold  at  not  less  than  par,  aod  the  proceeclB  thereof  shall  be 
devoted  solely  to  the  porposeof  enabling  the  carrier  properly  to  serve  the  pabUc 
No  part  of  the  proceeds  of  these  receiver's  certificates  until  the  loan  t«  the 
United  States  slmll  have  been  paid,  shall  be  used  to  pa;  any  principal  or  Interest 
upon  any  of  the  securities  of  the  companj-  (the  Kansas  City,  Mexico  4  Orient 
Railroad  Company)  or  of  the  receiver,  except  receiver's  certlflcatea,  and  oo 
dividends  or  distribution  of  profits  or  nraneye  of  any  iciod  Etiall  be  made  to  the 
stockhi>lder&,  bondholders,  or  noteboldere  of  any  of  the  Orient  lines  or  com- 
panies until  the  Governmeat  loan  shall  have  been  repaid. 

<6)  There  shall  be  deposited  as  security  for  the  loan  of  $2,500,000  receiver's 
certificates  payable  In  one  year  and  not  later  than  December  1,  1921,  issued 
under  proper  order  of  court,  and  liiere  shail  also  be  deposited  as  security  at 
least  90  per  cent  of  Hie  outstanding  gold  notes  (of  the  Kansas  City,  Mexico 
&  Orient  Bailroad  Company)  with  all  of  the  eollateral  now  deposited  as  security 
for  such  notes. 

<c)  There  shall  further  be  deposited  as  security  for  the  Qovemment  loan 
the  receiver's  certtflcatea  matnrins  In  1920  for  the  payment  of  which  the  loan 
is  to  be  employed.  There  ahall  be  issned  proper  orders  of  the  court  nuthorizing 
the  loan  and  the  security,  and  providing  definitely  that  upon  failure  to  pay  the 
Ooversment  loan  when  due  and  ntrf  later  than  December  1,  1921,  there  shall  be 
an  immediate  foreclosure,  and  the  property  shall  be  sold,  with  the  condition  of 
continued  operation  tipon  the  purchaser,  with  an  upfet  price  no  greater  than 
shall  be  suffldeat  to  take  care  of  the  principal  and  interest  that  may  be  due  on 
the  Government  loan,  or  on  tiie  receiver's  certUlcutes  to  be  deported  as  col- 
lateral  therefor,  and  necessary  coats  of  the  action.    And  there  shall  be  deposited 

65  I.  C.  C. 


tOAN   TO  KANSAS  CITY,  MEXICO  A  ORIENT  B,   R.  267 

wlQi  tbe  SecreUry  at  tbe  Treasury  the  aKreemeot  of  the  trustees  and  of  nt 
least  90  per  cent  of  the  securitr  holders,  including  at  leiist  90  per  cent  of  tbe 
holders  of  the  gold  notes,  that  la  tbe  event  of  default  in  payment  of  the  Ooveru- 
ment  loan,  the  property  shall  be  so  sold  and  with  such  comlltlona. 

(*>  The  order  of  tbe  court  and  the  agreement  of  the  scLurlty  holders  shall 
also  prortde  that  there  shall  be  no  payments  made  of  any  kind,  except  for  the 
legitimate  cost  of  aeration  aiialoK  after  December  1,  1920,  out  of  funds  or 
tnoneya  coming  into  tbe  possession  of  the  companies  or  of  the  receiver,  uutll 
the  Government  loans  shall  have  been  repaid,  except  that  the  legitimate  cost 
of  opn-atlon  of  the  lines  prior  to  Deccinhor  1,  1920,  may  be  paid  out  of  the 
proceeds  of  the  sale  of  the  receiver's  certificates  of  51,000,000  now  In  the 
Treasury,  or  from  eariilnfcs  or  locome  prior  to  said  date. 

Responsive  to  the  aforesaid  letter,  William  T.  Kemper,  receiver 
of  the  Kansas  City,  Mexico  &  Orient  Railroad  Company,  hereinafter 
referred  to  as  the  receiver,  on  September  27, 1920,  in  conformity  with 
a  decree  of  the  United  States  district  court  for  the  district  of  Kansas, 
first  division,  filed  with  the  Commission  a  suppleiueiital  application 
for  a  loan  with  which  to  meet  indebtedness  of  $2,500,000  in  receiver's 
certificates,  due  December  1, 1920, 

The  $1,000,000  of  receiver's  certificates  mentioned  in  paragraph  (a) 
above  have  been  authorized  to  be  issued  by  the  court  and  by  the 
Commission  with  restrictions  as  to  the  use  of  the  proceeds  thereof 
which  effectively  prevent  the  use  thereof  in  violation  of  the  restric- 
tions of  that  paragraph.  In  a  collateral  agreement,  breach  of  the 
conditions  of  which  is  made  the. basis  for  precipitating  the  repay- 
ment of  the  loan,  the  receiver  has  undertaken  to  observe  and  meet 
the  restrictions  upon  his  use  of  money  coming  into  his  possession 
or  the  possession  of  the  company  after  December  1,  1920,  as  ccai- 
tained  in  paragraph  {d).  This  agreement  is  made  pursuant  to 
authority  conferred  upon  the  receiver  by  the  decree  of  court  of  Sep- 
tember 23,  to  execute  such  further  instruments  and  to  take  such 
action  and  do  such  things  as  may  be  required  by  the  Interstate  Com- 
merce Commission  or  by  the  Secretary  of  the  Treasury  in  nego- 
tiating and  securing  said  loan  and  the  proceeds  thereof  and  the 
deposit  and  pledge  of  the  securities  therefor,  in  carrying  the  pur- 
poses of  the  order  into  effect. 

The  application  and  the  decree  of  court  upon  which  it  is  baaed 
offer  substantial  compliance  with  the  other  conditions  quoted,  except 
that  the  receiver  pleads  his  inability  to  deposit  90  per  cent  of  the 
outstanding  gold  notes  as  security  for  the  loan,  or  an  agreement  of 
the  trustees  and  of  90  per  cent  of  the  security  holders  as  required 
by  paragraphs  (c)  and  (d). 

As  reason  for  his  foilure  to  meet  all  the  conditions  prescribed  by 
tbe  Comibission,  the  receiver  recites  the  refusal,  because  of  legal  in- 
ability of  the  trustees  to  take  the  desired  action,  and  an  extremely 

86I.C.a 


.y  Google 


268  INTERSTATE  COUUBBOB  O01CMIS8I0K  BBP0BT8. 

scattered  ownership  of  the  notes,  making  it  practicallj  impoamble  to 
secure  concerted  action  within  a  reasonable  time.  The  receiver  offers 
as  security  for  a  loan  a  receiver's  certificate  which  has  been  author- 
ized by  decree  of  the  court,  dated  September  23,  1920,  to  become  a 
lien  "  upon  all  the  property,  real,  petsonal,  or  mixed  "  of  tiie  E^- 
sas  City,  Mexico  &  Orient  Bailroad  Company,  prior  to  and  imder- 
lying  all  other  Indebtedness  of  said  company,  including  the  note 
holders  aforesaid.  Said  decree  was  entered  with  the  consent  of  all 
the  parties  litigant  in  the  cause  wherein  the  receiver  was  appointed. 
These  include  the  Trustees  Corporation,  Limited,  of  London,  Eng- 
land (formerly  known  as  the  Trustees,  Executors,  and  Securities  In- 
surance Corporation,  Limited),  and  the  Columbia  Trust  Company, 
of  New  York  (formerly  known  as  the  Columbia-Knickerbocker 
Trust  Company),  which  are  the  trustees  under  the  collateral-trust 
indenture  of  the  Kansas  City,  Mexico  &  Orient  Railroad  Company, 
the  mortgage  under  which  its  collateral-trust  notes  are  outstanding, 
and  in  the  hands  of  the  public.  These  notes  represent  the  entire 
bonded  indebtedness  of  the  applicant,  all  the  bonds  of  its  only  other 
authorized  issue  being  pledged  as  security  under  its  said  collateral- 
trust  indenture.  Also  included  among  the  parties  litigant  is  the 
conunittee  of  note  holders  organized  under  a  note  holders  deposit 
agreement  to  protect  the  interests  of  the  holders  of  the  railroad 
company's  outstanding  collateral-trust  notes;  and  the  defendant,  the 
Kansas  City,  Mexico  &  Orient  Railroad  Company. 

As  the  proper  representatives  of  the  note  holders  conmiittee  and 
of  the  trustees  have  consented  to  the  entering  of  said  decree,  which 
subordinates  the  security  of  their  own  holt^gs  to  the  security  of  the 
loan  from  the  United  States,  further  agreement  by  the  note  holders 
or  trustees  will  be  waived. 

The  supplemental  application  now  before  the  Commismon,  and  the 
decree  of  court  upon  which  it  is  based,  set  forth : 

1.  That  the  amount  of  the  loan  desired  is  $2,600,000. 

2.  That  the  term  for  which  it  is  desired  shall  expire  on  December 
1, 1921. 

3.  That  the  purpose  of  the  loan  and  the  use  to  which  it  will  be 
applied  are  to  meet  maturing  indebtedness  consisting  of  receiver's 
certificates  due  December  1, 1920,  of  a  face  value  of  $2,600,000. 

4.  That  the  present  and  prospective  ability  of  the  receiver  to  repay 
the  loan  and  meet  the  requirements  of  ite  obligations  in  that  regard 
is  shown  by  the  statements  and  schedules  accompanying  the  amended 
and  supplemental  application  of  the  Kansas  City,  Mexico  A  Orient 
Railroad  Company  and  William  T.  Kemper,  its  receiver,  and  the 
Kansas  City,  Mexico  &  Orient  Railway  Company  of  Texas,  filed  with 
the  Commission  on  June  4, 1920. 

_,  aoLaa 


LOAl?  TO  KASaAS  OITY,   UBXICO  A  ORIENT  B.  B.  269 

6.  The  character  and  ralae  of  the  security  offered  for  the  loan  is 
a  receiver's  certificate  for  $2,600,000,  payable  December  1, 1921,  issued 
under  the  above-mentioned  order  of  court,  making  said  certificate  an 
underlying  lien  upon  the  entire  property  and  assets  of  the  receiver 
and  of  the  Kansas  City,  Mexico  &  Orient  Railroad  Company,  and  the 
receiver's  certificates  maturing  December  1, 1920,  as  and  when  taken 
up  by  the  receiver  with  the  proceeds  of  the  loan  applied  for. 

6.  That  the  extent  to  which  the  public  convenience  and  necessity 
will  be  served  by  the  loan  is  that  the  receiver  will  be  enabled  to  coa- 
tinne  the  operation  of  the  properties  of  the  company,  whereas  with- 
out the  aid  of  such  loan  he  would  be  compelled  to  permanently  sus- 
pend such  operation. 

There  have  heretofore  been  filed  snch  facts  in  detail  with  respect 
to  the  physical  situation,  ownership,  capitalization,  indebtedness, 
contract  obligations,  operation,  and  earning  power  of  the  receiver, 
together  with  such  other  facta  relating  to  the  propriety  and  expedi- 
ency of  granting  the  loan  appUed  for  and  the  ability  of  the  receiver 
to  make  good  the  obligation  as  the  Commission  deemed  pertinent  to 
the  inquiry. 

Dpon  reconsideration  of  the  entire  matter,  and  particularly  of  the 
supplemental  application  and  the  decree  of  court  upon  which  it  is 
based,  the  Commission  finds  that  the  making  of  the  proposed  loan  of 
$2,500,000  by  the  United  States  to  the  receiver  of  the  Kansas  City, 
Mexico  A  Urient  Bailroad  Company,  to  meet  maturing  indebt«dnees 
consisting  of  receiver's  certificates,  due  on  or  before  December  1, 
1920,  is  necessary  in  order  to  enable  the  applicant  properly  to  meet 
the  transportation  needs  of  the  public ;  that  the  prospective  earning 
power  of  the  receiver  and  the  character  and  vaJue  of  the  security 
offered  afford  reasonable  assurance  of  the  receiver's  ability  to  repay 
the  loan  within  the  time  fixed  therefor,  and  to  meet  his  other  obliga- 
tions in  connection  with  such  loan,  and  reasonable  protection  to  the 
tJnited  States;  and  that  the  receiver  is  unable  to  provide  himself 
with  funds  neoMWiy  for  the  aforesaid  purposes  from  other  sources. 

An  appropriate  certificate  to  the  Secretary  of  the  Treasury  ac- 
oordingly  will  issue. 

Ceriificats  No.  33  for  a  Loan  under  Section  HO  of  tKe  TmnaportOr 
(ion  Aety  19t0f  at  Amended. 

The  Intentate  C<«nmeroe  ConuniflBon  oertifiaa  to  the  Secretary 
of  the  Treamiy  its  findings: 

1.  That  the  making  of  a  loan  of  tS,fi00,000  by  the  United  States 
to  William  T.  KoMiiar,  receiver  for  the  Kansas  Ci^,  Mexico  A 
Orient  Bailroad  Company,  hareinaltar  rofarrod  to  u  tho  recoiver. 


D,=;,lz...,C00gIC 


270  INTEBSTATE   C0MMJ1ICC&  COMUISSION  RBFOBTS. 

for  the  purpose  of  enabling  him  to  meet  maturing  indebtednoas  con- 
sisting of  receiver's  certificates  due  Decnnber  1,  1920,  is  necMsary 
to  enable  the  receiver  properly  to  meet  the  transportation  needs  of 
the  public. 

2.  That  the  prospective  earning  power  of  the  receiver  and  the 
character  and  value  of  the  security  offered  are  su(^  as  to  furnish 
reasonable  assurance  of  the  receiver's  ability  to  r^ay  the  loan  within 
the  time  fixed  therefor,  and  to  meet  his  other  obligations  in  con- 
nection with  such  loan. 

3.  That  the  amount  of  the  loan  which  is  to  be  made  is  $2,500,000. 

4.  That  the  time  from  the  making  thereof  within  which  the  loan 
is  to  be  repaid  shall  be  on  or  before  December  1, 1921. 

5.  That  the  terms  and  conditions  of  the  loan,  including  the  secnr- 
ity  to  be  given  for  repayment,  are: 

(a)  The  loan  shall  be  repayable  on  or  before  December  1,  1921, 
and  shall  be  collaterally  secured  by  the  hypothecation  and  pledge  of 
a  receiver's  certificate  of  indebtedness  in  the  principal  amount  of 
$2,500,000,  which  shall  mature  December  1,  1921,  and  bear  intereet 
payable  semiannually  on  the  1st  day  of  June  and  December  at  the  rate 
of  6  per.  cent  per  annum,  said  receiver's  certificate  of  indebtedness  to 
be  substantially  in  the  form  and  substance  set  forth  in  paragraph 
3  of  that  certain  decree  of  the  United  States  district  court  for 
the  district  of  Kansas,  first'  division,  dated  and  entered  on  S^- 
tember  2S,  1920,  in  the  case  of  The  Trustees  Corporation,  Iiimited, 
and  Columbia  Trust  Company,  plaintiffs,  against  the  Eansas  City, 
Mexico  &  Orient  Railroad  Company,  The  Lord  Monson,  Cecil 
Braithwaite,  Frederick  Hurdle,  Benjamin  Nowgass,  Edward  Waj^, 
Sir  Ernest  Schiff ,  Willard  V.  King,  Leonor  F.  Loree,  S.  Da  vies  War- 
field,  W.  T.  Kemper,  and  E.  D.  Stair,  as  a  committee  constituted 
under  a  deposit  agreement  dated  March  12,  1912,  defeadants,  con- 
solidated  cause  No.  239-N. 

(b)  There  shall  be  deposited  with  the  Secretary  of  the  Treasury 
as  a  condition  precedent  to  the  delivery  of  the  cash  proceeds  of  the 
loan  to  the  receiter,  receivw's  certificates  signed  by  William  T. 
Kemper,  receiver,  and  countersigned  by  Morton  Albaugh,  clerk. 
United  States  district  court,  district  of  Kansas,  maturing  on  or 
before  December  1,  ^20,  for  the  face  amounts  and  with  serial  num- 
bers as  follows :  500  certificates  numbered  1  to  500,  inclusive,  $1,000 
each;  300  certificates  numbered  501  to  800,  incluBive,  $5,000  each; 
00  certificates  numbered  801  to  850,  inchisiTe,  $10,000  each;  850  cer- 
tificates for  a  total  face  amount  of  $2,500,000.  Said  certiflcatee  may 
be  canceled  by  stamping  or  writing  upon  the  face  thereof^  Can- 
celed— William  T.  Kemper,  Beoeiver,"  and  shall  be  held  by  the  Secre- 
tary of  the  Treasoiy  as  mmiBaeDts  of  titl*. 

mma. 


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LOAN   TO  KANSAS  CITX,   MEXICO  A  OBIEKX  B.  B.  271 

(tf)  The  receiver  shall  on  demand  of  the  Secretary  of  the  Treas- 
uiy,  with  the  concurrence  of  the  Interstate  Commerce  ConuniesioD, 
deposit  Buch  additional  security  as  may  be  from  time  to  time  re- 
quired; the  securities  pledged,  together  with  any  that  may  be 
pledged  hereafter  or  may  have  been  pledged  heretofore  as  security 
for  thifl  Loan  or  any  other  oHigation  ol  the  receiver  to  the  United 
States  for  loans  under  section  210  of  the  transportation  act,  1900,  as 
amended,  shall  be  applicable  in  like  raasaer  to  secure  the  payment  of 
any  and  all  each  Icrans. 

(d)  The  receiver  may  repay  aJl  orlapy  part. of  the  loan  at  any 
time  before  maturity.  The  collateral  security  shall  be  released  pro- 
portionately as  parts  of  the  loan  are  paid. 

(«)  The  receiver  has  agreed  in  an  instrument  in  writing  dated  the 
7th  day  of  October,  1920,  filed  with  the  Interstate  Commerce  Com- 
mission, to  the  following  conditions:  There  shall  be  no  payment 
made  by  the  receiver,  of  any  kind,  except  for  the  legitimate  cost  of 
operation  arising  after  December  1,  1920,  out  of  funds  or  moneys 
coming  into  the  possession  of  the  company  or  of  the  receiver,  until 
the  government  loan,  as  aforesaid,  shall  have  been  repaid,  except  that 
the  legitimate  cost  of  operation  of  the  lines  prior  to  December  1, 
1920,  may  be  paid  out  of  the  proceeds  derived  from  the  sale  of 
receiver's  certificates  of  $1,000,000,  due  December  1,  1920,  heretofore 
sold  in  accordance  with  the  authorization  of  this  Commission,  or 
from  earnings  or  income,  prior  to  said  date.  • 

(/)  In  the  event  the  Commission  shall  certify  to  the  Secretary  of 
the  Treasury  that  the  receiver  has  failed  or  refused  well  and  truly 
to  comply  with  the  terms  and  conditions  bdntained  in  said  agreement, 
the  whole  or  any  part  of  the  obligations  evidencing  the  loan,  as  the 
CommiBsitm  may  designate,  shall,  at  the  option  of  the  holder,  become 
doe  and  payable. 

6.  That  the  earning  power  of  the  receiver,  together  with  the 
character  and  value  of  the  security  offered,  furnish,  in  the  opinion 
of  the  Commission,  reasonable  assurance  of  the  receiver's  ability  to 
repay  the  loan  within  the  time  iixed  therefor,  and  reasonable  pro- 
tection to  the  United  Slates.     '  ^  '■  ' 

7.  "Kiat  the  receiver,  in  the  bpimon  of  'the  Commission,  is  unable 
to  provide  faimsetf  with  the  funds  neceasai^  for  the  aforesaid  pur- 
poses from  other  sources. 

Done  in  Washington,  D.  C,  this  11th  day  of  October,  1920. 
WI.0.0.      - 


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IHTEBSXATE  OOUUBBOB  OOUMISSION  BEFOBia, 


Finance  Docket  No.  994. 
IK  THE  MATTER  OF  THE  APPLICATION  OF  THE  MIS- 
SOURI PACIFIC  RAILROAD  COMPANY  FOR  A  LOAN 
FROM  THE  UNITED  STATES  TO  AID  IN  MEETING  MA- 
TURING INDEBTEDNESS  AND  IN  PROVIDING  EQUIP- 
MENT AND  OTHER  ADDITIONS  AND  BETTERMENTS. 


Submitted  September  IS,  19t0.    Decided  October  11,  19$0. 


Application  graated  Id  part  and  a  loan  of  (8,871,760  ai^roved. 

</.  G.  Drew  for  applicant. 

Refobt  of  the  Commission. 
Division  4,  Commissioners  Meter,  Daniels,  Eastman,  and  Potter. 
Bt  DineiON  4 : 

The  Missouri  Pacific  Railroad  Cconpanj,  a  carrier  b;  railroad 
subject  to  the  interstate  commerce  a<^,  hereinafter  referred  to  as 
the  applicant,  on  May  28,  1920,  made  two  applications  to  the  Inter- 
state Commerce  Commission  for  loans  from  the  United  Statos  in 
accordance  with  section  210  of  the  transportation  act,  1920,  one  for 
a  loan  to  meet  its  maturing  indebtedness  and  the  other  for  a  loan  to 
provide  itaelf  with  equipment.  On  July  16,  1920,  the  ^^cant 
mode  a  third  application  for  a  loan  to  aid  it  in  making  other  addi- 
tions and  betterments.    All  are  dealt  with  in  this  report.    ' 

In  the  applications,  as  amended  and  su^lemented,  the  applicant 
sets  forth: 

1.  That  the  amount  of  the  loan  desired  is  $9,791,928. 

2.  That  the  term  for  which  the  loan  is  desired  is  five  years  or 
longer. 

8.  That  the  purposes  of  the  loan  and  the  usee  to  which  it  will  be 
applied  are  to  meet  maturing  indebtedness,  tiub  purchase  of  new 
equipment,  and  the  making  of  additions  and  betterments,  as  fcdlowa: 
Tor  mattultlefl : 

To  pay  tke  Hinonrt  PadOc  Hallway  Codsmiv  coowUdated  6 
per  ctat  boDda  matniinc  Norambar  1, 1900 $B,  919, 000 

6BLaa 


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LOAK  TO   HISSOUKI  PACIFIC  B,  B.  273 

Fcff  flgntpmeDt: 

5  BWltchlmt  locomotlveH SIM,  GOO 

26  baggace  cani._ 600, 000 

10  panenger  coacbe« 286,000 

Total S8B,D0O 

h'or  other  addlttona  and  bettenneDts : 

Rail  and  other  track  material 175, 000 

Bridges,  treaties,  and  culverta 818, 649 

Additional  yard  and  Industrial  tracks 724,894 

Changes  of  grade  and  aligmnent 16, 000 

Signals  and  Interlockiiig  plants 175,406 

Telegraph  and  telephone  lines 80,067 

Freight  and  passenger  stations 107, 480 

Fuel  stations  and  appurtenances . 72,440 

Wat«  stations  and  appartenances . 872,026 

Shop  hnlldlngs  and  englnehouses 687, 038 

29. 588 

22,085 

Large  dnlnage  district  projects 20, 807 

lard  and   englnetionse  facilities    (Union  Railway,    Memphis, 

Tenn.) 176, 000 


Grand  total 9, 781, 929 

4.  The  present  and  prospective  ability  of  the  applicant  to  lepvy 
the  loan  and  meet  the  requirements  of  its  oUigations  in  that  regard. 

5.  That  the  security  offered  consiste  of  the  first  and  refunding 
mortgage  bonds  of  the  applicant,  as  foUowa:  series  A,  5  per  cent, 
maturing  February  1,  1966,  and  series  D,  6  per  cent,  maturing  Feb- 
ruary 1, 1949,  Id  BUch  amount  and  value  as  may  be  agreed  upon,  and 
in  addition  thereto,  to  secure  the  loan  aforesaid  for  the  purchase  of 
equipment,  a  lien  upon  the  equipment  in  tiie  form  of  an  equipment- 
trust  or  other  approved  method. 

6.  That  the  estent  to  which  the  public  convenience  and  necessity 
-will  be  served  by  the  loan  is  that  the  applicant  will  be  enabled  to 
maintain  its  credit  by  the  prompt  retirement  of  the  Diaturities  re- 
ferred to,  relieve  congestion  existing  in  its  tensinals,  and  furnish 
needed  additions  and  bettennenta  to  promote  efficient  operation  of 
itBxomi. 

Thft  applications  were  accompanied  by  such  facts  and  details  as 
tb*  Commisaion  required  with  respect  to  ih»  physical  aituation, 
owaenbip,  capitalization,  indebtedneaa,  contract  obligations,  opera- 
tion, and  earning  pomr  of  the  applicant,  together  with  sooh  othor 
facts  relating  to  the  propriety  and  azpedienoy  of  granting  the  loaa 
aM>li«d  for  and  the  ability  of  the  applicant  to  make  good  the  (AU* 
gation,  as  the  Commisvion  deemed  pertinent  to  the  inquiry, 
t»844'— 22— Vol  66 -U 


D,=;,lz...,C00gIC 


274 


INTERSTATE  OOUHBBCE  GOMUISSION  BEPORTS. 


The  Association  of  Railway  Executives  recommended  a  loan  to 
the  applicant  of  $4,394,429,  apportioned  as  follows :  For  the  meet- 
ing of  maturities,  $1,454,000;  for  the  purchase  of  freight  and 
switching  locomotives,  $97,260;  and  for  additions  and  hettermenta 
to  way  and  structures,  $2,843,179. 

The  following  it«ms  have  been  elinrttaated  from  the  application 
for  loan  for  additions  and  betterments  to  way  and  structures  aa 
not  directly  tending  to  promote  the  movement  of  freight-train  cars : 
Construction  of  a  6E)6-foot  eztensloii  to  s  frelglit  house  at  Gnrdon,  Ark..  (1, 360 
Constnictioa  of  a  350-foot  extension  to  saburban  passenger  track  at 

Klrkwood,  Mo 2, 325 

Construction  of  a  lavatory  for  car-depertmeDt  eracdorees  at  Holsington, 

Ksns 8.430 

Change  in  iiue  reported  necessary  on  account  of  ttte  Fort  Chartres  and 

Ivy  Land  drainage  district  No.  5 20, 807 


Total  -. 


.  27,922 


The  applicant  also,  subsequent  to  the  filing  of  its  application,  infor- 
mally requested  that  the  loan  for  maturities  in  a  partial  amount  of 
$4,362,000  be  for  a  term  of  one  year. 

Aft«r  investigation,  the  Commission  finds  that  the  making  in  part 
of  the  proposed  loan  by  the  United  States,  for  the  purposes  and  in 
the  amounts  as  follows: 


PnrpoM. 

KsUmitol 

loaned. 

$5,gio.ono 
in,«oo 

1 

M,0t7 

MS,  US 

as 

175,000 

muoUtm.. 

OUiM  additions  and^ttement,: 

lUuophb 

!,M(l,5m 

i»Z 

is  necessary  in  order  to  enable  the  applicant  properly  to  meet  the 
transportation  needs  of  the  public;  that  the  prospectire  earning 
power  of  the  applicant,  and  character  and  vi^ue.  of  the  Beeurity 
offered,  afford  reasonable  assurance  of  the  applicant's  ability  to  repay 
the  loan  within  the  time  fixed  therefor  and  to  meet  its  otiier  obliga- 
tions in  connection  with  such  loan,  and  reasonable  prottsetion  to  tin 
United  States;  and  that  the  applicant  is  unable  to  provide  itsaM 
with  funds  necessary  for  aforesaid  purposes  from  other  sonrcn. 
An  appropriate  certificate  will  be  issued. 


LOAN  TO  UISSOUKI  PACIPIC  B.  B.  276 

CtrtifietUe  No.  SS  for  a  Loan  under  Section  HO  of  the  TranaporioHon 
Act,  19£0,  at  Amonded. 
The  Interstate  Commerce  Commission  certifies  to  the  Secretary 
of  the  Treasury  its  findings ; 

1.  That  the  making  of  a  loan  of  $8,871,700  by  the  United  States 
to  the  Missouri  Pacific  Railroad  Company,  hereinafter  referred  to 
as  the  applicant,  for  the  purpose  of  aiding  it  in  meeting  maturing 
indebtedness  consisting  of  the  Missouri  Pacific  Railway  Company 
consolidated  first  mortgage  6  per  cent  bonds,  maturing  Kovembcr 
If  1920,  and  in  providing  itself  with  equipment  and  in  making  ad- 
ditions and  betterments  to  promote  the  movement  of  frei^t-train 
cars,  is  necessary  to  enable  the  applicant  properly  to  meet  the  trans- 
portation needs  of  the  public 

2.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  furnish 
reasonable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor,  and  to  meet  its  other  obligations 
in  connection  with  such  loan. 

3.  lliat  the  amount  of  the  loan  which  is  to  be  made  is  $8,871,760. 

4.  That  the  time  from  the  making  thereof,  within  which  the  loan 
is  to  be  repaid  in  foil,  shall  expire  on  July  1, 1929. 

5.  That  the  terms  and  conditions  of  the  loan,  which  shall  bo 
made  in  two  parts,  and  the  security  shall  be  as  follows: 

{a)  One  part  of  the  loan  shall  be  for  $4,362,000,  and  shall  mature 
November  1,  1921,  and  shall  be  collaterally  secured  by  the  pledge 
of  $5,816,000,  principal  amount  of  applicant's  first  and  refunding 
mortgage  6  per  cent  gold  bonds,  series  D,  maturing  February  1, 
1949.  These  bonds  are  in  temporary  form,  without  coupons,  ex- 
changeable for  engraved  bonds,  and  are  numbered  and  are  of  the 
denominations  and  principal  amonnte  as  follows : 

PrlDdpal 


T  a  37  to  H  Incloalve— 08  bonds,  at>-. . $100,000       96,800, OOp 

T  X  1— one  bond,  at ,..___,__-,      10,000  10,000 

T  T  1— one  bond,  at 1—  '     5,000     '  6,000 

T  M  I— one  bond,  at 1_-L.____-'. 1,006  1,000 

Total _■ — :„. 5, 816, 000 

(&)  The  other  part  of  the  loan  shall  "be  for  $4,509,760,  and  shall 
mature  July  1,  1929,  and  shall  be  collaterally  secured  by  the  pledge 
of  $6,013,000,  principal  amount  of  applicant's  fir^t  and  refunding 
mortgage  6  per  cent  gold  bonds,  series  D,  maturing  February  I9 
1949.  These  bonds  are  in  temporary  form,  without  coupons,  ex- 
changeable for  engraved  bonds,  and  are  numbered  and  are  Qf  th^ 
denominations  and  principal  amounts  as  follow^; 
« I.  C.  C. 

.,iz...,CoogIc 


276  INTERSTATE  COHMKBCE  COMMISSION  BEFOBTS. 

NoDibw.  Dcnomliu.t!on. 

T  C  85  to  T  C  154.  IncIualTe— 60  bonds,  tt $100,000       W.OOftOOO 

T  X  2—oDe  bond,  at 10,000  10,000 

T  M  2  to  T  M  4,-liicliiBlTft— three  bonds,  at 1,000  8.000 

Total «,  018, 000 

(o)  The  security  to  be  pledged  under  subparagraphs  (<t)  and  (fr) 
of  paragrspb  5  hereof  has  been  issued  under  an  indenture  of  mort- 
gage or  deed  of  trust,  dated  April  2,  1917,  executed  by  the  appli- 
cant to  the  Guaranty  Trust  Company  of  New  York  and  Benjamin 
F,  Edwards,  as  trust«e8. 

(d)  Applioant  may  repay  any  or  all  parts  of  the  loan  before 
maturity.  The  collateral  security  shall  be  released  proportionately 
as  parts  of  the  loan  are  repaid. 

{e)  The  applicant  shall,  on  demand  of  the  Secretary  of  th« 
Treasury,  with  the  concurrence  of  the  Interstate  C<Hnmerce  Com- 
mission, deposit  with  the  Secretary  of  the  Treasury  such  addi- 
tional security  as  may  be  from  time  to  time  required ;  the  securitiee 
pledged,  together  with  any  that  may  be  pledged  hereafter,  or  may 
have  been  pledged  heretofore,  as  security  for  this  loan  or  any  other 
obligation  of  the  said  applicant  to  the  United  States  for  loans  under 
section  210  of  the  transportation  act,  1920,  as  amended,  shall  be 
applicable  in  like  manner  to  secure  the  payment  of  any  and  all 
such  loans. 

(/)  The  applicant  has  agreed  in  an  instrument  in  writing,  dated 
the  30th  day  of  September,  1920,  filed  with  the  Interatate  Ccraunercb 
Commission,  to  the  following  conditions:  (1)  That  the  amount  to 
be  financed  by  it  in  connection  with  the  loan  shall  be  so  financed  that 
the  cost  to  it  of  any  loans  secured  from  sources  other  than  the 
United  States  government  shall  not  exceed  7}  per  cent  per  annum, 
including  in  such  cost  discounts,  attorneys'  fees,  and  any  and  all 
other  expenses  in  connection  therewith ;  (2)  the  expenditures  made 
from  the  loan  for  additions  and  betterments  shall  be  confined  to  such 
expenditures  as  may  be  chargeable  to  accounts  for  investment  in 
road  and  equipment  provided  in  the  Commission's  accounting  classi* 
fication  for  steam  roads  in  effect  at  the  time  the  expenditures  may  be 
made;  and  (S)  the  applicant  shall  furnish  the  Commission,  on  or 
about  January  1  and  July  1,  1921,  the  detailed  certificate  under  oath 
of  its  chief  engineer,  showing  the  character  and  costs  of  the  addi- 
tions and  betterments  made  with  or  in  connection  with  this  loan  for 
said  purposes.  The  loan  for  additions  and  betterments  shall  have 
been  expended  or  definitely  obligated  for  the  purposes  for  which 
loaned,  or  shall  be  repaid  to  the  United  States,  on  or  before  November 
1,  1921.  In  event  the  Commission  shall  certify  to  the  Secretery  of 
tlM  Treasury  Uiat  the  applicant  has  failed  or  refused  well  and  truly 

6SL0.a 


UOUS  TO  HISBOUU  FAOUia  B.  B.  277 

to  comply  with  any  ona  or  more  of  the  terms  uid  conditiona  con- 
tained in  said  agreement,  the  whole  or  any  part  of  the  obligations 
evidencing  the  loan,  as  the  Commission  may  designate,  shall,  at  the 
option  of  the  holder,  become  due  and  payable. 

6.  That  the  proepectiTe  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish,  in 
the  opinion  of  the  Commission,  reasonable  assoranoe  of  the  appli- 
cant's ability  to  repay  the  loan  within  the  time  fixed  therefor,  and 
reasonable  protection  to  the  United  Statea 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  itself  from  other  sources  with  the  funds  necessary  for  the 
aforesaid  purpose. 

Done  in  Washington,  D.  C,  this  11th  day  of  October,  1930. 
6Bl.G.a 


c,;:,iz...,CoogIc 


INTERSTATB  OOUftCeBCE  COUltlSSlON  ttEPOBTS. 


Finance  Docket  No.  1038. 
IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  WHEEL- 
IN&  &  LAKE  ERIE  RAILWAY  COMPANY  FOR  A  LOAN 
FROM  THE  UNITED  STATES  TO  MEET  MATURING  IN- 
DEBTEDNESS AND  FOR  OTHER  PURPOSES. 


Approved  bv  the  CommUaion,  Division  i,  Ovtober  12,  ISiO. 


Division  4,  Comhibsioners  Meteb,  Daniels,  Eastman,  and  Potteb. 

Amended  Certificate  No.  B^  far  a  Loan  under  Section  210  of  the 

Transportation  Act,  1920,  aa  Amended. 

The  Inter^ata  Commerce  Commiseiop  certifies  to  the  Secr^ary 

of  the  Treasury  its  findings : 

1.  That  the  making  of  a  loan  of  $1,460,000  by  the  United  States 
to  the  Wheeling  &  Lake  Erie  Railway  Company,  hereinafter  re- 
ferred to  as  the  applicant,  for  the  purpose  of  enabling  it  to  make 
additions  and  betterments  to  roadway  and  stru'^t'ires,  is  necessary 
to  enable  the  applicant  properly  to  meet  the  tram>pnrtation  needs 
of  the  public. 

2.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  furnish 
reasonable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor,  and  to  meet  its  other  obligations  in 
connection  with  such  loan. 

3.  That  the  amount  of  the  loan  which  is  to  be  made  is  $1,460,000. 

4.  That  the  time  from  the  making  thereof,  within  which  the 
loan  is  to  be  repaid  in  full  is  10  years  from  the  date  of  the  making 
of  the  last  installment  of  the  loan. 

5.  That  the  terms  and  conditions  of  the  loan,  including  the  security 
to  be  given  for  repayment,  are : 

(a)  The  loan  shall  be  made  in  installments  as  follows; 

First  toBtallment $400,000 

Second  iDstallment 400,000 

Third  installment 400,000 

Ponrth  Installment 260.000 

Total 1.460,000 

(()  The  first  installment  of  the  loan  shall  be  repaid  five  years  from 
tbe  date  thereof.  The  second  installment  of  the  loan  shall  be  repaid 
seven  years  from  the  date  thereof.  The  third  installment  of  the 
loan  shall  be  repaid  nine  years  from  the  date  thereof.  Tbe  fourth 
installment  of  the  loan  shall  be  repaid  10  years  from  the  date  thereof, 
(c)  The  entire  loan  shall  be  collaterally  secured  as  follows:  (1) 
Upon  the  making  of  the  fint  installment,  $400,000  by  the  pledge 

-     afi  1.  C.  C. 


tOAKT  TO  WSEELINQ  ft  LAKE  EBIE  RT.  279 

of  applicant's  refunding-mortgage  5  per  cent  bonds,  series  B,  in  the 
principal  amount  of  $800,000.  Said  bonds  are  in  temporary  form, 
without  coupons,  exchangeable  for  engraved  bonds,  and  are  num- 
bered and  are  of  the  denominations  and  principal  amounts  as  fol- 
lows: 

T-188toT-l»8.  Inclnsive.  two  bonds  at $50,000  JIOO.OOO 

T-213toT-21B,lncIoBiye,  seven  bonds  at 50.000  350.000 

T-271  to  T-277,  lndn»i¥e,  seven  bonds  at ^„    50, 000  350, 000 

Total 800, 000 

Said  boods  were  issued  uiuler  applicant's  refunding  mortgage  to 
the  Central  Tnist  Companr  of  New  York,  trustee,  dated  September 
1,  1916.  (2)  Upon  the  making  of  the  second  installment,  $400,000, 
by  the  further  i^edge  of  applicant's  refunding-mortgage  6  per  cent 
bonds,  aeries  B,  in  the  principal  amount  of  $400,000;  and  by  Uie 
further  pledge  of  applicant's  refunding-mortgage  6  per  cent  bonds, 
series  C,  in  the  principal  amount  of  $400,000.  Said  bonds,  series  B, 
are  in  temporary  form,  without  coupons,  exchangeable  for  engraved 
bonds,  and  are  numbered  and  are  of  the  denominations  and  principal 
amounts  as  follows:  Nos.  T-261  to  T-26S,  inclusive,  eight  bonds 
at  $50,000,  principal  amount  $400,000.  Said  bonds,  series  B,  were 
issued,  and  said  bonds,  series  C,  will  be  issued,  under  applicant's  re- 
funding mortgage  to  the  Centra]  Trust  Company  of  New  York, 
trustee,  dated  September  1, 1916.  (3)  Upon  Che  making  of  the  third 
installment,  $400,000,  by  the  further  pledge  of  applicant's  refunding- 
mortgage  6  per  cent  bonds,  series  C,  in  the  principal  amount  of 
$400,000.  Said  bonds  will  be  issued  under  applicant's  refunding 
mortgage  to  the  Central  Trust  Company  of  New  York,  trustee,  dated 
September  1,  1916.  (4)  Upon  the  making  of  the  fourth  installment. 
$260,000,  by  the  further  pledge  of  applicant's  refundingrmortgage  6 
per  cent  bonds,  series  C,  in  the  principal  amount  of  $400,000.  Said 
bonds  will  be  issued  under  applicant's  refunding  mortgage  to  the 
Central  Trust  Company  of  New  York,  trustee,  dated  September  1, 
1916.  Upon  the  making  of  the  said  fourth  installment  there  shall 
also  be  deposited  a  surety  bond  in  the  sum  of  $260,000  (said  surety 
bond  to  be  approved  by  the  Commission),  guaranteeing  the  subse- 
quent pledge,  as  further  security,  of  applicant's  refunding-mortgage 
6  per  cent  bonds,  series  C,  in  the  principal  amount  of  $260,000.  Said 
bonds  will  be  issued  under  applicant's  refunding  mortgage  to  the 
Central  Trust  Company  of  New  York,  trustee,  dated  September  1, 
1916.  (S)  The  collateral  security  pledged  in  respect  of  each  install- 
ment of  the  loan  shall  be  applicable  to  secure  the  repayment  of  the 
entire  loan. 

((/)  The  applicant  may  repay  all  or  any  part  of  the  loan  before 
maturity.  The  collateral  security  shall  be  released  proportionately 
as  parts  of  the  loan  are  repaid.  , 


280  nrrEBSTATB  coicuebce  oouuissioh  bepobts. 

(«)  The  applicant  shall,  on  demand  of  the  Secretary  of  the  Traas- 
luy,  with  the  concurrence  of  the  Interstate  Commerce  Commission, 
deposit  Trith  the  Secretary  of  the  Treasury  such  additional  seciirity 
as  may  be  from  time  to  time  required.  The  securities  pledged,  to- 
gether with  an;  tliat  may  be  pledged  hereafter  or  may  have  been 
pledged  heretofore,  as  security  for  this  loan  or  any  other  obligation 
of  the  said  applicant  to  the  United  States  for  loans  under  section 
210  of  the  transportation  act,  1920,  as  amended,  shall  be  applicable 
in  like  manner  to  secure  the  payment  of  any  and  all  such  loans. 

(/)  The  applicant  has  agreed  in  an  instrument  in  writing,  dated 
the  25th  day  of  September,  1920,  filed  with  the  Interstate  Commerce 
Commission,  to  the  following  conditions:  (1)  That  the  amount  to 
be  financed  by  it  in  connection  with  the  loan  shall  be  so  financed  that 
the  cost  to  it  of  any  loans  secured  from  sources  other  than  the  United 
States  government  shall  not  exceed  7i  per  cent  per  annum,  including 
in  such  cost,  discounts,  attorneys'  fees,  and  any  and  all  other  ez< 
penses  in  connection  therewith.  (2)  The  expenditures  made  from 
the  loan  for  additions  and  betterments  shall  be  confined  to  such 
expenditures  as  may  be  chargeable  to  accounts  for  investment  in 
road  and  equipment  provided  in  the  Commission's  accounting  classi- 
fication for  steam  roads  in  effect  at  the  time  the  expenditures  may 
be  made.  (3)  The  applicant  shall  furnish  the  Commission  on  or 
about  January  1  and  July  1,  1921,  the  detailed  certificate  under  oath 
of  its  chief  engineer,  showing  the  character  and  costs  of  the  addi- 
tions and  betterments  made  with  or  in  connection  with  this  Iowa 
for  said  purposes.  The  loan  for  additions  and  betterments  shall 
have  been  expended  or  definitely  obligated  for  the  purposes  for 
which  loaned,  or  shall  be  repaid  to  the  United  States,  on  or  before 
November  1,  1921.  In  the  event  that  the  Commission  shall  certify 
to  the  Secretary  of  the  Treasury  that  the  applicant  has  failed  or 
refused  well  and  truly  to  comply  with  any  one  or  more  of  the  terms 
and  conditions  contained  in  said  agreement,  the  whole  or  any  part 
of  the  obligations  evidencing  the  loan,  as  the  Commission  may  des- 
ignate, shall,  at  the  option  of  the  holder,  become  due  and  payable. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish,  in 
the  opinion  of  the  Commission,  reasonable  assurance  of  the  appli- 
cant's ability  to  repay  the  loan  within  the  time  fixed  therefor,  and 
reasonable  protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  itself  with  the  funds  necessary  for  the  aforesaid  purpose 
from  other  sources.  Certificate  No.  24,  of  September  29,  ItKilO,  will 
be  canceled. 

Done  in  Washington,  D.  C,  this  12th  day  of  October,  1920 


i 


LOAN   10  WHBKUNQ  A  L&K£  ERIE  BY. 


Finance  Docket  No.  1038. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  WHEEL- 
ING LAKE  ERIE  RAILWAY  COMPANY  FOR  A  LOAN 
FROM  THE  UNITED  STATES  TO  MEET  MATURING  IN- 
DEBTEDNESS AND  FOR  OTHER  PURPOSES. 


)V  the  CommUtUm,  Divinion  i.  October  IS,  JBiO. 


DivifflON  4,  Commissioners  Meter,  Daniels,  Eabtman,  and  Potter. 
Amended  Certificate  No,  S6  for  a  Loan  under  Sectum  210  of  the 
TroMportation  Act,  1920,  as  Amended, 
Th«  Interstate  Commerce  Commission  certifies  to  the  Secretary  of 
the  Treasury  its  findings : 

1.  That  the  making  of  a  loan  of  $1,000,000  by  the  United  States  to 
the  Wheeling  &  Lake  Erie  Railway  Company,  hereinafter  referred  to 
•8  the  applicant,  for  the  purpose  of  enabling  it  to  meet  in  part  its 
maturing  indebtedness  consisting  of  short-term  obligations  maturing 
in  the  montii  of  December,  1920,  is  necessary  to  enable  the  applicant 
properly  to  meet  the  transportation  needs  of  the  public. 

2.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  furnish 
reasonable  assurance  of  the  applicant's  ability  to  repay  the  losn 
within  the  time  fixed  therefor,  and  to  meet  its  other  obligations  in 
connection  with  such  loan. 

5.  That  the  amount  of  the  loan  which  is  to  be  made  is  $1,000,000. 
4.  That  the  time  from  the  making  thereof,  within  which  the  loan  is 

to  be  repaid  in  full  is  five  years. 

6.  That  the  terms  and  conditions  of  the  loan,  including  the  security 
to  be  given  for  repayment,  are: 

(a)  The  loan  shall  be  for  $1,000,000  and  shall  be  collaterally  se- 
cured by  the  pledge  of  Wheeling  &  Lake  Erie  Railway  Company  re- 
fnnding-mortf^ge  6  per  cent  bonds  in  the  principal  amount  of 
$1,800,000  due  September  1,  1966.  These  bonds  are  in  temporary 
totm,  without  coupons,  exchangeable  for  engraved  bonds  and  are 
numbered  and  are  of  the  denominations  and  principal  amounts  as 
follows: 

T-278  to  T-280,  Incloaive,  8  bouds  at J50,000        $160,000 

T-15B  to  T-163,  inclualve,  6  bonds  at 50,000  250.000 

T-168  to  T-176,  inclnaive,  8  bonds  at 60.000         400,000 

T-e  to  T-86,  IncluBlTe.  81  bonds  at 20.000  620.000 

T-lOO  to  T-128,  inclnsive,  18  bonds  at 20,000         880,000 

Total r- 1,800,000 


282  IKTEBSTAT^  COUUBBOB  OOUinsSION  BEFOBTS. 

Said  bonds  were  issued  under  applicant's  refunding  mortgage  to  tin 
Central  Trust  Company  of  New  York,  trustee,  dated  September  1, 
1916. 

(b)  The  loan  shall  be  repaid  five  years  from  the  date  thereof.  The 
applicant  may  repay  all  or  any  part  of  the  loan  before  maturity.  The 
collateral  security  shall  be  released  proportionately  as  parts  of  the 
loan  are  repaid. 

(c)  The  applicant  shall  on  demand  of  the  Secretary  of  the  Treas- 
ury, with  tbe  concurrence  of  the  Interstate  Commerce  Commission, 
deposit  with  the  Secretary  of  the  Tre^ury  such  additional  secunty 
as  may  be  from  time  to  time  required.  The  securities  pledged,  to- 
gether with  any  that  may  be  pledged  hereafter  or  may  have  beMi 
pledged  heretofore,  as  security  for  this  loan  or  any  other  obligation 
of  the  said  applicant  to  the  United  States  for  loans  under  section  210 
of  the  transportation  act,  1920,  as  amended,  shall  be  applicable  in  like 
manner  to  secure  the  payment  of  any  and  all  such  loans. 

(d)  The  applicant  has  agreed  in  an  instrument  in  writing,  dated 
the  25th  day  of  September,  1920,  filed  with  the  Interstate  CoBoroerce 
Commission,  to  the  following  conditions :  ( 1 )  That  the  amount  to  be 
financed  by  it  in  connection  with  the  loan  shall  be  so  financed  that  the 
cost  to  it  of  any  loans  secured  from  sources  other  than  the  United 
States  government  shall  not  exceed  7i  per  cent  per  annum,  induding 
in  such  cost,  discounts,  attorneys'  fees,  and  any  and  all  other  expenses 
in  connection  therewith.  In  the  event  that  the  Commission  ^»U 
certify  to  the  Secretary  of  the  Treasury  that  the  applicant  has  failed 
or  refused  well  and  truly  to  comply  with  any  one  or  more  of  the  terms 
and  conditions  contained  in  said  agreement,  the  whole  or  any  part  of 
the  obligations  evidencing  the  loan,  as  the  Commission  may  designate, 
shall,  at  the  option  of  the  holder,  become  due  and  payable. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish,  in  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor,  and  reason- 
able protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  CommisuMk,  is  unable 
to  provide  itself  with  the  funds  necessary  for  the  aforesaid  purpose 
from  other  sources. 

Certificate  No.  25,  September  29, 1920,  will  be  cance1'>d. 
Done  in  Washington,  D.  C,  this  12th  day  of  October,  1920. 

66  I.  a  0. 


Digilzed  by  Google 


CBETmCATB  OP  EAKSAS  CITY,  MEXICO  «  ORIEirP  E.  B.      283 


Finance  Dockxi  No.  76. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  RE- 
CEIVER  OF  THE  KANSAS  CITY,  MEXICO  &  ORIENT 
RAILROAD  COMPANY,  FOR  AUTHORITY  TO  ISSUE 
RECEIVER'S  CERTIFICATE  AS  COLLATERAL  SECUR- 
ITY. 


Submitted  Beptentber  tS,  1920.    Decided  Ootober  li,  JWO. 


Anttiorlty  granted  to  Issue  a  receiver's  certiflcate  for  $2,000,000,  to  be  dated 
De-ember  1,  1820,  aod  to  matnre  December  1,  1621,  with  interest  at  the 
rate  of  S  per  cent  per  annum ;  and  to  pledge  said  certificate  with  the  Secre- 
tary of  the  Treasury  as  security  for  a  loan  of  (2,600,000  from  the  United 
States  under  section  210  of  the  transportation  act,  1920,  as  amended. 
Clifford  HUted  for  applicant. 

Refobt  of  TCm  CoumsaiON. 
Division  4,  Cohhissionebs  Metes,  Daioels,  Eastman,  and  Potter. 
Bt  DivigioN  4 : 

W.illiam  T.  Kemper,  rccMiver  of  the  Kansas  City,  Mexico  &  Orient 
Railroad  Company,  acting  as  a  common  carrier  by  railroad  engaged 
in  interstate  commerce,  seeks  authority  under  section  20a  of  the 
interstate  commerce  act  to  issue  a  receiver's  certificate  for  $2,600,000 
and  to  pledge  the  same  with  the  Secretary  of  the'Treasury  as  security 
for  a  loan  of  a  like  amount  from  the  United  States,  under  the  pro- 
Tisions  of  section  210  of  the  transportation  act,  1920,  as  unended. 
Heretofore  by  appropriate  order,  entered  November  9,  1917,  in  an 
action  brought  by  The  Trustees  Corporation,  Limited,  et  al.,  against 
said  railroad  company,  the  district  court  of  the  United  States  for 
the  district  of  Kansas,  first  division,  duly  appointed  the  applicant 
receiver  of  that  railroad  Since  that  date  the  applicant  has  been, 
and  is  now,  operating  the  railroad. 

The  certificate  proposed  to  be  issued  is  to  be  dated  December  1, 
1920,  and  will  mature  December  1,  1921.  It  will  bear  interest  at  the 
rate  of  6  per  cent  per  annum,  payable  semiannually,  on  June  1  and 
December  1.  It  is  to  be  issued  under  and  pursuant  to  an  order  of 
the  United  States  district  court  for  the  district  of  Kansas,  first 
division,  dated  September  23,  1920,  duly  authorizing  such  issue. 
There  are  now  issued  and  outstanding  authorized  receiver's  certifi- 
cates in  the  aggregate  principal  sum  of  $2,500,000.  These  certifi- 
cates will  mature  December  1,  1920.  We  have  granted  this  appli- 
cant a  loan  in  the  sum  of  $2,500,000  under  the  provisions  of  sectiob 
65I.C.C. 


£84  INTBBSTATE  GOUBIBBOB  OOUUtSSION  BEPOBTS. 

SIO  of  the  transportation  act,  1920,  as  ameDded,  for  the  poipoae  of 
retiring  the  receiver's  certificates  maturing  December  1,  1920.  As 
securitj  for  this  loan  the  receiver  desires  authority  to  pledge  with  the 
Secretary  of  the  Treasury  the  certificate  proposed  to  be  issued. 

The  application  was  made  under  oath,  si^ed,  and  filed  by  said 
William  T.  Kemper,  receiver.  As  required  by  section  20a,  notice  of 
the  filing  of  the  application  has  been  given  to,  and  a  copy  thereof 
filed  with,  the  governor  of  each  of  the  states  in  which  the  applicant 
operates.  No  objection  to  the  issue  by  this  Commission  of  an  order 
granting  the  application  has  been  offered  by  any  state  authority. 

Upon  consideration  of  the  record,  we  find  that  the  proposed  issue 
and  pledge  of  said  receiver's  certificate  (a)  are  for  a  lawful  object 
within  the  duly  authorized  purposes  of  the  applicant  and  com- 
patible with  the  public  interest,  which  is  necessary  and  appropriate 
for  and  consistent  with  the  proper  performance  by  the  applicant  of 
service  to  the  public  as  a  common  carrier,  i.nd  which  will  not  impair 
his  ability  to  perform  that  service;  and  {b)  are  reasonably  necessary 
and  appropriate  for  such  purpose. 

An  appropriate  order  will  be  entered. 

ORDER. 

Full  investigation  of  the  matters  and  things  involved  in  this  pro- 
ceeding having  been  had  and  the  Division  having,  on  the  date  hereof, 
made  and  filed  a  report  containing  its  findings  of  fact  and  conclu- 
sions thereon,  which  report  is  hereby  referred  to  and  made  a  part 
hereof ; 

/(  it  ordered,  That  William  T.  Kemper,  receiver  of  the  Kansas 
City,  Mexico  &  Orient  Railroad  Company,  be,  and  he  is  hereby, 
authorized  (1)  to  issue  a  receiver's  certificate  in  the  principal  amount 
of  $2,500,000  in  pursuance  of  and  in  accordance  with  an  order  and 
decree  of  court  dated  September  23, 1920,  in  The  Trustee's  Corpora- 
tion, Limited,  and  Columhia  Trust  Company  v.  The  Kansas  CUy, 
Meaico  tfl  Orient  Railroad  Company,  et  al.,  consolidated  No.  239-N, 
pending  in  the  district  court  of  the  United  States  for  the  district  of 
Kansas,  first  division,  said  receiver's  certificate  to  bear  interest  at  the 
rate  of  6  per  cent  per  annum,  payable  aemiannuaHy  on  the  1st  day 
of  June  and  of  December,  and  the  principal  thereof  to  be  payable 
on  December  1, 1921 ;  said  receiver's  certificate  to  be  in  the  form  sub- 
mitted  with  the  application;  and  (2)  to  pledge  said  receiver's  cer< 
tificftte  with  the  Secretary  of  the  Treasury  as  security  for  a  loan  of 
$2,600/X)0  from  the  United  States  to  said  receiver,  under  section  210 
of  the  transportation  act,  1920,  as  amended. 

651.0.  a 


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CEBTIFIOA.TB  07  KANSAS  OITT,  MEXICO  ft  ORIENT  B.  B.       286 

It  is  further  ordered,  That  said  receiver's  certificate  shall  be  used 
solely  for  the  purpose  set  forth  in  said  application  and  shall  not  be 
used,  sold,  pledged,  or  repledged,  or  otherwise  disposed  of,  for  any 
other  purpose,  except  as  may  be  authorized  by  future  order  of  tiiia 
Conunission. 

Jt  ia  fvrtker  ordered.  That  said  applicant  shall  report  to  this  Com- 
mission, within  10  days  thereafter,  (1)  the  issue  of  said  receiver's 
certificate,  (2)  the  pledge  of  said  receiver's  certificate,  and  (3)  the 
payment  or  redemption  of  said  receiver's  certificate. 

And  it  is  further  ordered,  That  nothing  herein  shall  be  construed 
to  imply  any  guaranty  or  obligation  as  to  said  receiver's  certificate, 
or  interest  thereon,  on  the  part  of  the  TTnited  States. 

651.0.0. 


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INTBB8IATB  C0MU£BOE  COMUISSION  BEFOBTS. 


Finance  Docket  No.  77. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  UNION 
TERMINAL  COMPANY  FOR  AUTHORITY  TO  ENTER 
INTO  EXTENSION  AGREEMENTS  WITH  HOUJERS  OF 
UNSECURED  NOTES. 


Submitted  October  i,  1920.    Decided  October  IS,  1910, 


Authority  grasted  for  execution  of  contracts  by  applicant,  extending  matarity 
dates  of  $550,000.01  of  Its  certain  B  per  cent  unsecured  notes  from  October 
10,  1920,  to  October  10,  1021,  with  Interest  at  the  rate  of  e  per  cent  per 


John  C,  Robertson  for  applicant. 

Report  of  the  Commibsiok, 
Division  4,  Cohhissioners  Meter,  Danieu,  Eastman,  and  Pottkb. 
By  Division  4: 

The  Union  Terminal  Company,  a  common  carrier  hj  railroad  en- 
gaged in  interstate  commerce,  applies  for  authority  under  section  20a 
of  the  interstate  commerce  act  to  enter  into  contracts  with  the  respec- 
tive holders  of  $550,000.01  of  its  certain  two-year  5  per  cent  unse- 
cured notes,  for  extension  of  their  dates  of  maturity  from  October 
10, 1920,  to  October  10, 1921,  and  increase  of  the  interest  rate  from  5 
per  cent  to  6  per  cent.  These  not«s  were  originally  dated  October  10, 
1917,  and  have  been  heretofore  extended  to  become  payable  on  Octo- 
ber 10,  1920. 

The  applicant  is  a  terminal  corporation  furnishing  union-depot 
and  other  passenger  facilities  to  certain  railroads  entering  Dallas, 
Tex.,  pursuant  to  an  operating  agreement  dated  April  1, 1912,  a  copy 
of  which  has  been  filed  in  this  proceeding.  Joint  control  over  the 
applicant  is  exercised  by  a  group  of  these  roads  by  virtue  of  owner- 
ship of  approximately  97  per  cent  of  its  capital  stock.  Of  the 
$560,000.01  of  notes  sought  to  be  extended,  $471,428.58  are  in  the  pos- 
session of  roads  enjoying  this  proprietary  control  (or  of  an  affiliated 
company,  as  in  the  case  of  the  Atchison,  Topeka  &  Santa  Fe  Railway 
Company,  of  which  the  Gulf,  Colorado  &  Santa  Fe  Railway  Com- 
pany is  a  subsidiary).  The  remaining  two  notes,  aggregating 
$78,571.43,  are  held  by  the  City  National  Bank  of  DaUas,  Tex.  The 
holders  of  the  notes  have  agreed  to  the  proposed  extension  for  the 
'  period  of  one  year,  in  consideration  of  which  the  interest  rate  is  to 

esLaa 

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BOTES  OF  UNION  TERMINAL  OO.  287 

be  iDcreaeed  from  fi  per  cent  to  6  per  cent  per  annum.  No  commis- 
sions or  other  charges  of  any  kind  are  to  be  incurred. 

The  applicant  submits  that  it  is  without  means  to  pa;  the  notes 
which  fall  due  on  October  10,  1920,  and  desires  to  make  this  short- 
term  extension  in  order  to  assure  its  credit  while  endeavoring  to  per- 
fect arrangements  for  permanent  financing. 

Investigation  reveals  that  the  outstanding  securities  of  the  appli- 
cant consist  of  capital  stock  aggregating  $46,000  and  first-mortgage 
bonds  aggregating  $5,000,000. 

It  appears  that  the  application  was  made  under  oath,  signed,  and 
filed  on  behalf  of  the  applicant  by  one  of  its  executive  officers 
duly  designated  for  that  purpose;  that  notice  of  the  filing  of  the 
application,  as-required  by  section  20a,  has  been  given  to,  and  a  copy 
thereof  filed  vith,  the  governor  of  the  state  of  Texas,  the  only  state 
in  which  the  applicant  operates,  and  that  no  objection  to  the  grant- 
ing of  the  application  has  been  made. 

Upon  consideration  of  the  record,  we  find  that  the  execution  of  the 
proposed  contracts  by  the  Union  Terminal  Company  for  the  exten- 
sion of  its  said  two-year  6  per  cent  unsecured  notes  to  mature  October 
10,  1921,  with  interest  payable  at  the  rate  of  6  per  cent  per  annum 
(a)  is  for  a  lawful  object  within  its  corporat«  purposes  and  com- 
patible with  the  public  interest,  which  is  necessary  and  appropriate 
for  and  consistent  with  the  proper  performance  by  it  of  service  to  the 
public  as  a  common  carrier,  and  which  will  not  impair  its  ability 
to  perform  that  service,  and  (&)  is  reasonably  necessary  and  appro- 
priate for  such  purpose. 

We  furUier  find  that  the  obligations  to  be  created  by  the  execution 
of  said  extension  contracts,  together  with  all  other  outstanding  notes 
of  the  applicant  of  a  maturity  of  two  years  or  less,  aggregate  more 
than  5  per  cent  of  the  par  value  of  the  securities  of  Uie  applicant 
outstanding  at  the  date  of  the  application. 

An  appropriate  order  will  be  entered. 

ORDER. 

Full  investigation  of  the  matters  and  things  involved  in  this 
application  having  been  had,  and  the  said  Division  having,  on  the 
date  hereof,  made  and  filed  a  report  containing  its  findings  of  fact 
and  conclusions  thereon,  which  report  is  hereby  referred  to  and  made 
a  part  hereof : 

//  is  ordeTed,  That  the  Union  Terminal  Company  be,  and  it  is 
hereby,  authorized  to  enter  into  contracts  with  the  respective  holders 
of  said  two-year  5  per  cent  unsecured  notes,  dated  October  10,  1917, 
(the  aggregate  amount  of  which  is  $550,000.01,  and  the  maturity 
dates  of  which  have  heretofore  been  extended  to  October  10,  1920). 

65 1.  CO. 


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288  INTERSTATE   COUHBBCB  COHMISSIOK  BEFOBTB. 

for  the  purpose  of  extending  the  maturity  dotes  thereof  from  October 
10, 1920,  to  October  10, 1921,  as  follows: 

PresCDt  boldem.  Amonntt. 
J.  L.  Lancaster  and  G.  L.  Wallace,  receivers  of  tbe  Tezaa  k  Padflc 

Rallwaf  Company 97S,G71.48 

Houston  &  Texas  Central  Railroad  Company 78,  S71. 48 

Atchison,  Topeka  4  Santa  Fe  Railway  Company 78,671.43 

St.  Louis,  San  Francisco  &  Texas  Railway  CompaDy 78,1^71.43 

Chicago,  Rock  Island  &  Padflc  Railway  Company 78, 571. 48 

St.  Louis  Southwestern  Railway  Company  o(  Texas 78, 671. 4S 

aty  NaUonal  Bank  ot  DsUas.  Tex 89.28B.71 

City  NaUonal  Bank  or  Dallas.  Tex 39,286. 73 

Thefie  notes,  for  the  extended  period  as  herein  authcnized,  are  to 
bear  interest  at  the  rate  of  6  per  cent  per  annum,  to  be  payable  semi- 
annually, B3xA  to  be  redeemable  as  prorided  in  said  proposed  eztensioa 
contracts,  which  contracts  shall  he  substantially  in  the  forms  indi- 
cated by  the  application. 

It  ig  further  ordei-ed,  That  within  10  days  after  the  executitm  and 
delivery  of  said  extension  contracts,  a  true  copy  of  each  shall  be  filed 
with  this  Oommisfflon. 

And  it  is  farther  ordered,  That  nothing  herein  dull  be  construed 
to  imply  any  guaranty  or  obligation  as  to  said  notes,  or  intereet 
thereon,  or  as  to  said  extension  OHitracte,  on  the  part  of  the  United 
States. 

6B  I.  c.  a 


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NOTES  OF  NEW   YORK,   NEW  HAVBM   A  HARTFORD  B.  B. 


■  Finance  Docket"  No.-  66; 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  NEW 
YOJIK,  NEW  HAVEN  &  HARTFORD  RAILROAD  COM- 
PANY FOR  AUTHORITY  TO  ISSUE  PROMISSORY 
NOTES  AND  TO  ISSUE  AND  PLEDGE  EQUIPMENT- 
TRUST  NOTES. 


Submitted  October  11,  19S0.    Decided  October  16,  19S0. 


Aottiorlty  granted  (1)  to  Ueue  $2,000,000  of  7  per  cent  promtssory  noteB,  the 
proceeds  thereof  to  be  used  to  reimburse  appltcsut's  treasury  tor  moneys 
advanced  to  obtain  equipment  under  proposed  equipment- trust  agreement, 
and  (2)  to  Issue  and  pledge  $3,500,000  of  equipment-trust  notes,  $2,800,000 
thereof  to  be  elass-A  notes  bearing  interest  at  T  per  cent  per  annum,  aii4 
(700,000  to  be  clas8-B  notes  bearing  iotereet  at  6  per  cent  per  aannm; 
t2,000,000  of  said  clasB-A  notes  to  be  pledged  as  security  for  the  $2,00a,Q00 
of  7  per  cent  notes,  and  tlie  renujlnder  of  the  claae-A  notes  and  all  the 
c!as8-B  note.i  to  be  pledged  as  security  for  a  loan  of  $1,600,000  from  the 
United  Stotcs. 
E.  G.  Buckland  for  applicant. 

Report  of  the  Commission. 
Division  4,  Cohuir^ioners  Meter,  Daniels,  Eastman,  And  Potteb. 
Bt  Division  4: 

The  New  York,  New  Hbtsii  &  Hartford  Railroad  Company,  a 
commoa  carrier  by  railroad  engaged  in  interstate  commerce,  applies 
for  authority  under  section  20a  of  the  interstate  cwnmerce  act  to 
issue  (1)  six  months'  renewable  7  per  cent  promisaory  notes  aggre- 
gating ^,000,000,  to  be  negotiated  'at  par  with  certain  named  banks, 
for  the  purpose  of  reimbursing  applicant's  treasury  for  moneys  ad' 
vanced  and  to  be  advanced  in  the  procurement  of  certain  equipment; 
(2)  $2,800,000  of  class-A  equipment-trust  notes,  bearing  interest  at 
7  per  cult  per  annum,  and  $700,000  of  class-B  equipment-trust  notea, 
bearing  interest  at  6  per  cent  per  aimtim;  and  (S)  promissory  de- 
mand note  or  notes  aggregating  $8,130,000,  the  proceeds  thereof  to 
be  used  for  the  completion  of  terminal  facilities,  classification  yards, 
and  other  permanent  improvements. 

The  applicant  proposes  to  execute  an  equipment-trust  agreement 
EE  with  the  New  England  Car  Company  and  the  Old  Colony  Tru.st 
Company,  a  tentative  copy  of  which  is  submitted  with  the  applica- 
tion, and  to  issue  thereunder  equipment-trust  notes  aggregating 
$3,500,000,  divided  into  two  classes,  known  aa  clasH  A  and  class  B ; 
the  former  amounting  to  $2,800,000,  and  entitled  to  a  first  li«i  on 

e6844*— 22— Vol  60 19 

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1290  uttebstatb  couubbcpb  oouhissiok  bbports. 

tile  equipment  ooTered  by  the  said  agreement,  the  latter  amountiiig 
to  $700,000,  and  entitled  to  a  second  lien  upon  the  said  equipment. 
Class-A  notes  are  to  bear  interest  at  the  rate  of  7  per  cent  per 
annnm  and  are  to  mature  serially  at  Bemiannual  periods  covering  a 
period  of  15  years  from  the  date  of  the  execution  of  the  said  agree- 
ment. Class-B  notes  are  to  bear  interest  at  the  rate  of  6  per  cent  per 
annufo  and  are  to  mature  seriaUy  at  umual  periods  covering  a 
period  of  seven  years  frcan  the  date  of  execution  of  the  said  agree- 
mmt. 

The  applicant  submits  that  it  is  unable  at  the  present  time  to 
sell  the  equipment-trust  notes  at  an  advantageous  price.  For  the 
purpose  of  raising  needed  funds  to  reimburse  its  treasury  for  moneys 
advanced,  and  to  be  advanced,  to  obtain  the  equipment  described 
below,  the  applicant  desires  authority  to  issue,  and  to  negotiate 
with  certain  banlcs  and  trust  companies,  promissory  notes  in  the 
aggregate  principal  amoimt  of  $2^000,000,  which  are  to  bear  interest 
at  Om  rate  of  7  per  cent  per  annum  and  to  be  payable  six  months 
after  date,  with  the  privilege  of  renewal  from  time  to  time  for 
like  periods  not  exceeding  three  years  in  tJie  aggregate,  and  to 
pledge  with  the  banks  and  trust  companies  making  the  loans  class-A 
equipment-trust  notes  in  the  aggregate  principal  amount  of  $2,000,000, 
as  collateral  security  for  the  pranissoiy  notes. 

The  applicant  desires  authority  to  pledge  the  remaining  $800,000  of 
class-A  equipment-trust  notes,  and  all  of  the  $700,000  of  class-B 
equipment-trust  notes,  with  the  Secretary  of  the  Treasury  as  security 
in  part  for  a  loan  in  the  sum  of  $1,500,000,  under  section  210  of 
the  transportation  act,  1990,  as  amended,  should  the  same  be  granted 
upon  separate  applications  therefor. 

The  proceeds  of  the  loans  from  the  banks  and  trust  companies 
are  to  be  used  toward  the  procurement  of  the  following  described 
equipment : 

25  ST-lnch  by  80-Incb    (482)   United  States  Mandardlxed  destgo  miperhe&t«r 
Itsht  moontalD  locomodTaB  at  a  price  of  108,677  eadi. 
B  27-Iticb  b7  80-lBch    (482)   Unfted  States  otandardlMd  deslga  ai^ertieater 
Ufjit  mountain  locomotlveB,  eqalpped  wltb  feed-watsr  beaten,  at  a  price 
of  166^12  each. 

10  26-inclt  b;  28-ltidi  (080)  United  States  staadardlBed  design  8-wheel  switch- 
ing locomotlTes  at  a  price  of  949,S06  eadt. 
8  mnltlple-nnit  motor  ears  for  passenger  sertiee  at  an  estlnmted  price  of 
f7S,000  eadl. 

14  mnltiple-ault  cars  for  passenger  anvlce  at  an  estimated  price  of  (88,000 

It  appears  that  the  applicant  has  made  advance  to  the  car  com- 
pany named  in  eqaipment-trust  agreement  £E,  to  enable  it  to 
obti^  the  equipment.    It  is  stated  on  behalf  of  the  applicant  that 

B5LG.a 


H0TB8  cm  KBW  TtmF,  iraw  HATB]T  4  HABTPOBD  K.  B.       291 

ii  irill  be  necessary  to  mRke  fdriher  adrftnces.  iUpdn  the  exectrtion 
of  ihe  eqaipbMnt-tmst  notes  by  die  »pplicant  they  are  to  be  delivered 
to  the  Old  Colony  Trust  Company,  and  after  authentication  by  that 
trust  company,  delivered  to  the  oar  company  in  payment  for  the 
eqoipment,  as  provided  in  the  agreement.  The  latter  ia  to  return 
thflU  td  -Qie  i^pHcant  in  liquidation  and  saliBfaction  of  the  ad- 
TUeeti  Upon  the  receipt  of  th«  notes  from  the  car  company, 
tin  appfioant  desires  to  pledge  thera  as  abore  set  forth. 

llie  applicant  states  that  no  arrangements  have  as  yet  been  made 
for  the  Issue  of  the  demand  promissory  note  or  notes  in  the  amount 
of  $8480,000.  Action  upon  the  request  for  authority  to  issue  such 
note  or  n6tea  is  therefore  deferred. 

The  application  was  made  under  oath,  srgned,  and  filed  on  behalf 
of  the  applioant  by  dne  of  its  ezecative  officers  duly  designated  for 
that  purpose.  As  required  by  section  SOa,  notice  of  the  filing  of  the 
api^cttion  has  bees  given  to,  and' a  copy  thereof  filed  with,  the 
goreroor  of  each  of  the  states  in  which  the  applicant  operates.  No 
objec^on  to  th«  granting  of  the  application  has  bera  offered  by  any 
state  authority. 

Upon  consideratioiL  of  tlie  record,  we  find  that  the  proposed 
issue  of  $&,000,00f>  of  7  per  cent  prtnnisstny  notee,  and  the  proposed 
issne  and  pledge  of  $S,500,000  of  equipment-trust  notes,  by  the 
New  T*rk,  New  Hsmn  &  Haitford  Railroad  Company  (a)  are  for 
lawful  objects  within  its  oorporate  purposes,  and  compatible  witii 
die  public  interest,  which  are  niecessary  and  appropriate  for  and 
conaistont  with  the  prop^*  performance  by  it  of  service  to  the 
public  as  &  common  carrier,  and  which  will  not  impair  its  ability 
to  petf form  tliat  service ;  and  (6)  are  reasonably  necessary  and  appro- 
I»ute  for  sneh  psrpoees. 

An  appropriate  order  will  be  entered.- 

ORDER. 

Investigation  of  the  matters  and  things  involved  in  this  appli- 
cation having  been  had,  and  the  said  Division  having,  on  the  date 
hereof,  made  and  filed  a  report  containing  its  findings  of  fact  and 
conclusions  thereon,  which  report  is  hereby  referred  to  and  made 
a  part  hereof: 

It  ig  ordered,  That  the  New  York,  New  Haven  &  Hartford  Rail- 
road Company  be,  and  it  is  hereby,  authorized  to  issue  its  prom- 
issot7  notes  in  the  aggregate  principal  amount  of  $2,000,000,  pay- 
able in  tax  months,  with  the  privilege  of  renewal  for  like  periods 
dnrii^  an  aggregate  period  of  three  years;  said  notes  to  bear  in- 
terest at  the  rate  of  7  per  cent  per  annum,  and  to  be  substantially 
in  the  form  submitted  with  the  application;  said  notes  for  the 

esLca 


292  INTERSTATB  OOHHEBCE  COHIflESION  BBPOSTS. 

amoanta  specified  below  to  be  oegotiated  wiUi  tbe  following  nuited 
banks:  First  National  Bank,  Boston,  $450,000;  National  Shawiinit 
Bank,  Boston,  $450,000;  Old  Colony  Trust  Company,  Boston, 
$460,000;  American  Trust  Company,  Boston,  $260,000;  MerdiaQts 
National  Bank,  Boston,  $400,000,  and  to  be  secured,  d<dlar  for  dollar, 
by  pledges  of  class-A  equipment-trust  notes  in  Uw  aggregate  face 
amount  of  $3,000,000,  tbe  issue  and  pledge  of  which  are  hereinafter 
authorized;  said  promissory  notes,  or  the  proceeds  thereof,  to  )jo 
used  solely  for  the  purpose  of  reimbursing  the  treasury  of  the  appli- 
cant, in  part,  for  advances  made,  and  to  be  made,  by  it  to  the  New 
.England  Car  Company  with  which  to  obtain  the  equipment  de> 
scribed  in  the  application,  in  accordance  with  the  aforesaid  pro- 
posed equipment-trust  agreement  KE. 

/(  M  further  ordered,  That  the  New  York,  New  Haven  &  Hart- 
ford Railroad  Company  be,  and  it  is  hereby,  authorized  to  issue 
$3,600,000  of  equipment-trust  notes  to  be  issued  under  and  pursuant 
to,  and  to  be  secured  by,  the  aforesaid  proposed  equipment-bust 
agreement  EE ;  $2,800,000  of  said  equipment-trust  notes  to  be  desig- 
nated as  class-A  notes  and  to  be  in  the  denomination  of  $1,000  each, 
to  bear  interest  (evidenced  by  coupons  attached  thereto)  at  tbe  rate 
of  7  per  cent  per  annum,  payable  semiannually  on  the  Ist  day  of 
April  and  the  1st  day  of  October,  in  each  year,  to  mature  aerify 
in  the  yeai^  1921  to  1935,  inclusive,  on  the  datas  and  in  the  amounte 
set  forth  in  said  agreemoit,  to  be  substantially  in  the  form  set 
forth  in  the  agreement,  to  be  registered  and  subject  to  a  redemp- 
tion as  provided  in  the  agreement,  and  to  be  entitled  to  a  first  lien 
upon  the  equipment  described  in  the  application;  and  $700,000  of 
said  equipment-trust  notes  to  be  designated  as  class-B  notes,  to  be 
in  the  denomination  of  $100,000  each,  to  bear  interest  (evidenced  by 
coupons  attached  thereto)  at  the  rate  of  6  per  cent  per  annum, 
payable  semiannually,  to  mature  serially  on  the  1st  day  of  October 
in  each  of  the  years  1921  to  1927,  inclusive,  to  be  substantially  in 
the  form  set  forth  in  said  agreement,  and  to  be  entitled  to  a  second 
lien  upon  the  aforesaid  equipment;  all  of  said  class-A  and  cloas-B 
equipment-trust  notes  to  be  delivered  to  the  Old  Colony  Trust  Com- 
pany, and  by  it  authenticated  and  delivered  to  or  on  the  order  of  the 
New  England  Car  Company  in  payment  for  the  equipment  trans- 
ferred to  said  trust  company  as  provided  in  said  agreement;  said 
equipment-trust  notes  then  to  be  delivered  by  the  car  company  to  the 
applicant  in  liquidation  of  and  satisfaction  for  the  moneys  advanced 
with  which  the  equipment  was  obtained  by  tbe  car  company,  said 
equipment-trust  notes  thereby  becoming  available  for  pledge  by  the 
applicant  as  hereinafter  authorized. 

It  is  further  ordered,  That  the  New  York,  New  Haven  &  Hartford 
Elailroad  Company  be,  and  it  is  hereby,  authorized,  upon  receiving 

05 1. 0. 0. 


KOnS  OP  NEW  YORK,  HEW  HATSN  A  HABTFOBD  K.  B.       293 

the  eqnipnuoit-tnuit  notes  as  aforesaid,  (1)  to  pledge  $2,000,000  of 
said  clasB-A  equipment-trust  notes  as  collateral  securit;  with  the 
aforementioned  banks  and  trust  companies  as  hereinbefore  apedfied; 
these  equipment-trust  notes  not  to  be  otherwise  pledged,  sold,  re- 
pledged,  or  otherwise  disposed  of  by  the  applicant  except  as  ordered 
by  this  Commission;  and  (2)  to  pledge  the  remaining  $800,000  of 
class-A  equipment-trust  notes,  and  all  of  the  $700,000  of  class-B 
equipment-bnifit  notes,  with  the  Secretary  of  the  Treasury  as  security 
in  part  for  a  loan  of  $1,600,000,  under  section  210  of  the  transporta- 
tion act,  1920,  as  amended,  should  the  same  be  granted  upon  sepa- 
rate applications  therefor;  these  equipment-trust  notes  not  to  be 
otiierwise  pledged,  sold,  repledged,  or  disposed  of  by  the  applicant 
except  aa  ordered  by  this  Commission. 

It  is  further  ordered.  That  the  applicant  shall,  for  the  period  end- 
ing December  SI,  1920,  and  for  each  six  months'  period  thereafter 
ending  June  30  and  December  31  in  each  year,  report  to  this  Com- 
mission within  SO  da}^  after  the  close  of  said  periods,  all  pertinent 
facts  relating  to  the  issue  and  dispositioD  and  pledge  of  notes  as 
herein  authorized,the  applicationof  the  proceeds  thereof,  the  payment 
or  satisfaction  of  said  notes,  and  the  release  from  pledge  of  such  notes 
as  are  herein  authorized  to  be  pledged;  each  report  to  be  signed 
by  an  executive  officer  of  the  applicant  baring  knowledge  of  the  facts 
and  verified  by  his  oath,  and  to  be  made  periodically  as  herein  re- 
quired until  all  of  said  notes  shall  have  been  issued  and  disposed  of 
and  until  all  of  said  notes  shall  have  been  paid  or  otherwise  satisfied 
and  until  all  pledged  notes  shall  have  been  released  from  such  pledge. 

And  it  is  further  ordered^  That  nothing  herein  shall  be  construed 
to  imply  any  guaranty  or  obligation  as  to  said  notes,  or  interest 
thereon,  on  the  part  of  the  United  States. 

6BI.aG. 


.d  by  Google 


INTEKSTATB   CXIMMEBOE  OOUMIBSION  1BP0BI8. 


Finance  Docket  No.  9^3. 
APPLICATION  OF  THE  CENTKAL  NEW  ENGLAND  RAIL- 
WAY  COMPANY   FOR  A,  LOAN  FROM  THE   UNITED 
STATES    TO    PROVIDE    ADDITIONS    AND    BETTER- 
MENTS.  _^ ^, 

Bubmilted  October  t,  1920.    Decicled  October  19,  J$SO. 


Application  granted  nod  a  loan  at  $300,000  approved. 
E,  G.  Buckland  for  applicant. 

RbPOBT  or  THS  COUUISSION. 

Division  4,  CoMMiaaioNiRs  Metes,  DAwmra,  EAffrMAS,  awb  Pom^ 
Br  DmflioN  4: 

The  Central  New  England  Railway  Company,  a  carrier  by  rail- 
'  road  subject  to  the  interstate  commerce  act,  hereinafter  referred  to 
as  the  applicant,  on  May  20,  1920,  made  application  to  the  Inter- 
state Commerce  Commission  for  a  loan  from  the  United  States,  in 
accordance  with  section  210  of  the  transportation  act,  1920,  to  pro- 
vide itself  with  additions  and  betterments  to  way  and  structures,  and 
on  July  23, 1920,  the  applicant  amended  the  application. 

In  the  application,  as  amended,  the  applicant  sets  forth: 

1.  That  the  amount  of  the  loan  desired  is  $800,000. 

2.  That  the  term  for  which  the  loan  is  desired  is  IS  years. 

S.  That  the  purpose  of  the  loan  and  the  use  to  which  it  will  be 
applied  are  to  aid  the  applicant  in  providing  itself  with  additiooa 
and  betterments  to  way  and  structures,  as  follows : 

Additional  main  tracks $S,S08 

AddlUonal  yard  tracks  and  atdings 265,470 

aiiopa 228,010 

Stations  and  station  facilities 4,114 

MlsceltaneouB 6,106 

Total ■- 500,000 

4.  Its  present  and  prospective  ability  to  repay  the  loan  and  to 
meet  its  obligations  in  regard  thereto. 

5.  That  the  security  offered  is  applicant's  first-mortgage  4  per 
cent  fiO-year  gold  bonds. 

6.  That  the  extent  to  which  the  public  convenience  and  necessity 
will  he  served  by  the  loan  is  the  more  prompt  movement  of  can 
which  will  become  possible  with  the  added  capacity. 

The  application  waa  accompanied  by  such  facts  in  detail  as  the 
CoQunission  required  with  respect  to  the  physical  mtuation,  owner- 

65  tea 


LOAN  TO  OENIKAL  VSW  BNQL&ND  BY. 


296 


ship,  oapitalization,  indebtednMS,  contract  obligations,  operation, 
and  earning  power  of  tha  apfdicant,  togeUier  with  such  other  factf 
relating  to  the  propriety  and  expediency  of  granting  the  loan 
applied  for  and  the  ability  of  the  applicant  to  make  good  the  obli- 
gation, as  the  CcHnmissioQ  deemed  pertinent  to  the  inquiry. 

The  Association  of  Rail-way  Executives  recommended  the  making 
of  a  loan  of  $300,000  to  the  applicant 

After  investigation,  the  Commission  finds  that  the  making  of  a 
loan  by  the  United  States  of  $800,000  to  the  Central  New  England 
i(ailway  Cwnpany,  to  be  used  in  the  manner  herein  below  set  forth 


bji^ 


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Ad^tlooal  jui  tcwto  and  ildista . 
StitiuoD*  aiid  I 


is  necessary  to  enable  the  applicant  properly  to  meet  the  transporta- 
tion needs  of  the  public 

The  Commission  further  finds  that  the  earning  power  of  the 
aj^licant,  together  with  the  character  and  value  of  the  security 
offered,  affords  reasonable  assurance  of  the  applicant's  ability  to 
repay  the  loan  within  the  time  fixed  therefor,  and  to  meet  its  other 
obligations  in  connection  with  such  loan,  and  reasonable  protection  to 
the  United  States,  and  that  tiie  applicuit  is  unable  to  provide  itself 
with  the  funds  necessary  for  the  aforesaid  purposes  from  other 
sources. 

An  appropriate  certificate  will  be  issued. 


Certificate  No.  S5  for  a  Loan  wider  Section  BIO  of  the  TroMporiaHon 
Act,  19S0,  a»  Amended. 

The  Interstate  Commerce  Commission  certifies  to  the  Secretary 
of  the  Treasury  its  findings : 

L  That  the  making  of  a  loui  of  $800,000  by  the  Unitwl  States  to 
the  Central  New  Enj^and  Bailway  Company,  hereinafter  r«ferred 
to  as  the  applicant,  for  the  purpose  of  aiding  the  applicant  to  pro- 
vide itself  witii  additions  and  bettwrnaots  to  way  and  structoreg,  is 
necessary  to  enable  the  applicant  properly  to  meet  the  transporta- 
tion needs  of  the  public 

S.  That  the  proepective  earning  power  of  the  applicant  and  Um 
diaracter  and  value  of  &m  security  offered  are  waA  as  to  fontisb 

•6i.aa 


.y  Google 


296  INTERSTATE  COMMERCE  COMMISSION   BEPOBTS. 

reasonable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor  and  to  meet  its  other  obligations  in 
connection  with  such  loan. 

3.  That  the  amount  of  the  loan  which  is  to  be  made  is  $300,000. 

4.  That  the  time  from  the  making  thereof,  within  which  the  loan 
is  to  be  repaid,  is  15  years. 

5.  That  the  terms  and  conditions  of  the  loan,  including  the  security 
to  be  givwi  for  repayment,  are : 

{a)  The  loan  shall  be  repaid  in  ftve  equal  annuel  installments  of 
$60,000  each,  maturing,  consecutively,  11  to  15  years  from  the  date 
of  the  loan,  and  shall  be  collaterally  secured  by  the  pledge  of  the 
Central  New  England  Railway  Company's  first-mortgage  4  per  cent 
SO-year  gold  bonds,  due.  1961,  in  the  par  value  of  $750,000.  Said 
bonds  are  of  the  denomination  of  $1,000,  and  numbered  13428  to 
14177,  inclusive,  a  total  of  750  bonds.  These  bonds  were  issued  under 
an  indenture  of  mortgage  of  the  Central  New  England  Railway 
Company  to  the  Farmers'  Loan  &  Trust  Company,  trustee,  dated 
January  1,  1911. 

(6)  The  applicant  may  repay  all  or  any  part  of  the  loan  before 
maturity!  The  collateral  security  shall  be  released  proportionately 
as  parts  of  the  loan  are  repaid. 

(c)  The  applicant  shall,  on  demand  of  the  Secretary  of  the  Treas- 
ury, with  the  concurrence  of  the  Interstate  Commerce  Commission, 
deposit  with  the  Secretary  of  the  Treasury  such  additional  security 
as  may  be  from  time  to  time  required;  the  securities  pledged,  to- 
gether with  any  that  may  be  pledged  hereafter,  or  may  have  been 
pledged  heretofore,  as  security  for  this  loan  or  any  other  obligation 
of  the  applicant  to  the  United  States  for  loans  under  section  210 
of  the  transportation  act,  1920,  as  amended,  shall  be  applicable  in 
like  manner  to  secure  the  payment  of  any  and  all  such  loans. 

(d)  The  applicant  has  agreed  in  an  instrument  in  writing,  dated 
the  20th  day  of  September,  1920,  filed  with  the  Interstate  Commerce 
Commission,  to  the  following  conditions:  (1)  That  the  amount  to 
be  financed  by  it  in  connection  with  the  loan  shall  be  so  financed  that 
Ute  coat  to  it  of  any  loans  secured  from  sources  other  than  the  United 
States  government  shall  not  exceed  7^  per  cent  per  annum,  including 
in  such  cost  discounts,  attorneys'  feee,  and  any  and  all  other  expenses 
in  connection  therewith;  (S)'the  expenditnres  made  from  the  loan 
shall  be  confined  to  sucli  exttenditurea  aa  Uay  be  chargeable  to  ac- 
counts for  investment  in  road  and  equipment  provided  in  the  Com- 
mission's accounting  elasmflcation  for  steam  roads  in  effect  at  the 
time  the  expenditures  may  be  made;  and  (S)  the  applicant  shall 
fDrnish  the  Commission  on  or  about  January  1  and  July  1,  1921, 
the  detailed  certificate  under  oath  of  its  chief  engineer,  showing  thu 


...Google 


LOAN  TO  CHUTBAL  kbw  bnoland  bt.  297 

character  and  costs  of  the  additions  and  betterments  made  with  or 
in  connecticm  with  this  loan  for  said  purposes.  The  loan  shall  bare 
been  expended  or  defimtol;  obligated  for  the  purposes  for  which 
loaned,  or  shall  be  repaid  to  the  United  States,  on  or  before  July  1, 
1921.  In  event  the  Commission  shall  certify  to  the  Secretary  of 
the  Treasury  that  the  applicant  has  failed  or  refused  well  and  truly 
te  comply  with  any  one  or  more  of  the  terms  and  conditions  con- 
teined  in  said  agreement,  the  whole  or  any  part  of  the  obligations 
evidencing  the  loan,  as  the  Commission  may  designate,  shall,  at  the 
option  of  the  holder,  become  due  and  payable. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnishes,  in  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor,  and  reason- 
able protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  itself  with  the  funds  neceesary  for  the  aforesaid  purposes 
from  other  sources. 

Done  in  Washington,  D.  C,  this  19th  day  of  October,  1920. 


D,=;,lz...,C00gIC 


298  INTEBSXATE  COUUBBCB  001£lCIS»0n  BEFOBTS. 


FiRANOB  Docket  No.  942. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  CHI- 
CAGO, INDIANAPOLIS  &  LOUISVILLE  RAILWAY  COM- 
PANY FOR  A  LOAN  FROM  THE  UNITED  STATES  TO 
AID  IN  PROVIDING  EQUIPMENT  AND  OTHER  ADDI- 
TIONS AND  BETTERMENTS. 


BtibmMed  Otstober  H,  iBiO.    Decided  Ootober  19,  19t0. 


Application  graated  in  part  and  a  loan  of  $200,000  approved. 

H.  S.  Ktarie  for  applicant. 

Repokt  of  the  CoMHtSSlON. 
Division  4,  CoMMissioNEHa  Mbteb,  Danielb,  Easthan,  and  Pottbi. 
Bt  DnrtBioN  4: 

The  Chicago,  Indianapolis  &  Louisville  Railway  Company,  a  car- 
rier by  railroad  subject  to  the  interstate  commerce  act,  hereinafter 
referred  to  as  the  applicant,  on  May  29,  1920,  made  application  to 
the  Interstate  Commerce  Commission  for  a  loan  from  the  United 
States,  in  accordance  with  section  210  of  the  transportation  act,  1920, 
to  provide  itaelf  with  equipment  and  additions  and  betterments  to 
way  and  structures,  and  on  July  22  and  September  8,  1920,  tiie 
applicant  amended  the  application. 

In  the  application,  as  amended,  the  applicant  sets  forth: 

1.  That  the  amount  of  the  loan  desired  is  $500,000. 

2.  That  the  term  for  which  the  loan  is  desired  is  16  years. 

8.  That  the  purposes  of  the  loan  and  the  uses  to  which  it  will  be 
applied  are  to  aid  the  applicant  in  providing  itself  with  new  equip- 
ment and  in  building  a  new  steel-car  shop,  as  follows : 
New  •qulpment : 

To  pnrchaM  800  gondola  cars 1940,000 

Addltlms  and  betterments  to  way  and  stractarcs: 

To  erect  a  modem  steel-car  shop 200,000 

Total 1,145,000 

4.  Its  present  and  prospective  ability  to  repay  the  loan  and  to  meet 
the  requirements  of  its  obligations  in  regard  thereto. 

6.  That  the  security  offered  is  (a)  as  to  the  loan  for  equipment, 
equipment-trust  bonds  in  an  amount  equal  to  the  amount  of  loaHf 
and  in  addition  thereto  pledge  of  applicant's  first  and  general  mort- 
gage J}  per  cent  gold  bonds,  due  May  1, 1966,  in  such  amount  as  may 
be  required,  and  (&)  as  to  the  loan  lor  additions  and  hetterments, 

05 1,  c.  a 


UMK  TO  OBlOAaO,  UtDIUTAPCHJS  A  LOUISTILLB  RT.         299 

'pkdg»  oi  tBOOjOOO  of  a^^lioanfe's  fiist  and  geneml  mortgage  6  per 
oentfiald  bondBy  due  Stay  1, 1M6. 

6.  That  tha  o^tM^  to  which  tlie  public  c<HLTeiueDce  and  nacessily 
will  be  aerred  is  that  the  loan  will  enable  the  applicant  to  proTide 
itself  with  the  aeceaeafy  eqaipment  and  adequate  shop  faciUtiee  to 
serre  the  pablic,  eapeoi^ly  in  the  tran^Mrtation  of  coal  and  manu- 
factuied  artitdea. 

The  application  was.  accompanied  by  such  facts  in  detail  as  the 
Ckanmiasion  required  with  respect  to  the  physical  situatitm,  owner- 
ship, capitalization,. indebtednees,  contract  obligations,  operation,  and 
oaraing  power  of  the  applicant,  together  with  such  oUier  facts  re- 
lating to  the  propriety  and  expediency  of  granting  the  loan  applied 
for  utd  the  ability  «f  the  applicant  to  make  good  the  obligation,  as 
the  Commission  deemed  pertinent  to  the  inquiry. 

The  Aflsociation  of  Sailway  Executives  reconmieuded  a  loan  to 
the  apjdicant  ia  the  total  amount  of  $500,000;  apportiwed  $200,000 
for  additions  and  bettenneDts  and  $300,000  for  the  purchase  of 
freight  cars. 

The  ^>pUcaat,'by  UMer  of  its  president,  dated  October  12,  1920, 
requested  deferred  oopsideration  of  that  portion  of  ite  application 
in  rec^ieet  of  equipment.  The  Commission  is  of  the  opinion  that 
deferred  consideration  should  be  given  to  the  matter  of  a  loan  for 
equipipent,  and  so  finds. 

Aiter  inTestigation  the  Commission  finds  that  the  making  of  the 
whole  of  the  proposed  loan  by  the  United  States  in  the  amount  of 
$300,000  for  the  purpose  of  constructing  a  modern  steel-car  repair 
shop  at  La  Fayette,  Ind.,  is  necessary  to  enable  the  applicant  properly 
to  meet  the  transpor^tion  needa  of  the  public;  tiiat  the  prospective 
warning  power  of  the  applicant  and  character  and  value  of  the 
rieciuity  offered  afford  reasonable  assurance  of  the  applicant's  abil- 
i^  to  repay  the  loan  within  the  time  fixed  therefor  and  to  meet  its 
oUier  obligations  in  connection  with  such  loan,  and  reasonable  pro- 
tection to  the  United  States ;  and  that  the  applicant  is  unable  to  pro- 
vide itself  from  other  sources  with  funds  necessary  for  the  afore- 
said pnrpoM. 

An  appYvpciat*  ceit^cate  will  be  issued. 


CtrtAfioate  No.  36  for  a  Loan  undar  Section  SIO  of  the  Trantportation 
Aet,  ISeO,  ai  Ammdod. 

The  Interstate  Commerce  Commisraon  certifies  to  the  Secretary  of 
the  Treasury  its  findings: 

1.  That  the  making  of  a  loan  of  920i),000  by  the  United  States  to 
the  Chicago,  Indianapolis  ft  Louisville  Bailway  Company,  herun- 

ttsLaOi  /  -        I 


SOO  INTBBSTATE  OOICHBBGI  OOmiraSIOH  BBPOBIB. 

after  referred  to  as  the  applicant,  for  the  purpose'  of  aiding  the  appli- 
cant in  providing  itself  with  additions  and  bAttetme^ts,  ia  neceMary 
Co  enable  the  applicant  properly  to  meet  the'  transportatiaB  needs  of 
the  public.  i 

2.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  famish  rea- 
sonable assurance  of  the  applicant's  ability  to  repay  the  loan  within 
the  time  fixed  therefor,  and  to  meet  its  other  obligations  in  connec- 
tion with  such  loan. 

8.  That  the  amount  of  the  loan  which  is- to  be  made  is  $800,000. 

4.  That  the  time  from  the  making  thei>eof  within  'wbich  the  loon  ia 
to  be  repaid  in  full  is  15  years. 

5.  The  the  terms  and  conditions  of  the  loan^  including  the  seeurity 
to  be  given  for  repayment,  are: 

(a)  The  loan  shall  be  collaterally  secured  by  pigging  $300,000, 
principal  amount,  of  applicant's  first  and  genefkl  mortgage  5< 
per  cent  50-year  eeries-A  gold  bonds,  due  May  i;  1M6,  iasiied  under 
an  indenture  of  mortgage,  dated  May  1,  1916,  executed  by  the  ap- 
plicant to  the  Guaranty  Trust  Company  of  New  Tork,  and  William 
L.  Taylor,  trustees,  the  same  being  300  bonds  in  denomtnatioft  of 
$1,000  and  ntmibered  4531  to  4630,  inclusive,  and  0469  to  5661,  in- 
clusive. 

(&)  The  applicant  may  repay  all  or  any  partof  the  loanbefore 
maturity.  The  collateral  secarity  shall  be  released  proportionately 
as  parts  of  the  loan  are  repaid. 

(c)  The  applicant  ^all  on  demand  of  the  Secretary  of  the  Treas- 
ury, with  the  concurrence  of  the  Interstate  Gdmmeixw  Commission, 
deposit  such  additional  secunty  as  may  be  from  time  to  time  re- 
quired ;  the  securities  pledged,  togd;ber  With  any  that  may  be  pledged 
hereafter,  or  may  have  been  pledged  heretofore,  as  security  for  this 
loan  or  any  other  obligation  of  the  applicant  to  the  United  States  ■ 
for  loans  under  section  210  of  the  transportation  aet,  19B0,  as 
amended,  shall  be  applicable  in  like  taanner  to  secure  the  repayment 
of  any  and  all  such  loans.  .  .    : 

(d)  The  applicant  has  agreed  in  an  instrument  in  writing,  dated 
the  28th  day  of  September,  1920,  filed  with  the  Interstate  Commerce 
Commission,  to  the  following  conditions:  (1)  That  the  amount  to  be 
financed  by  it  in  connection  with  the  loan  shall  be  so  financed  that  the 
cost  to  it  of  any  loans  secured  from  sources  other  than  the  United 
States  government  shall  not  exceed  7^  per  cent  per  annum,  inclading 
in  such  cost  discounts,  attorneys'  fees,  and  any  an4  aU  otlfer -expanses 
in  connection  therewith;  (2)  the  expenditures  made  from  i^  loan 
for  additions  and  betterments  ^all  be  confii^ed  to  ^ch  ftxpenditurea 
as  may  be  chargeable  to  accounts  for  investment  in  road  and  vquip- 

«bi.aa 


LOAir-TO  OBICMO,  IHZnANAPOUS  A  LOUISVILLE  B7.         301 

ment  provided  in  the  Conunission's  acoounting  clasaification  for 
steun  roods  in  effect  at  the  time  the  expenditures  may  be  made;  and 
(8)  the  applicant  shall  furnish  the  CommiBeion  on  or  about  Janu- 
ary 1  and  July  1, 1921,  the  detailed  certificate  under  oath  of  its  chief 
engineer,  sbowiii^  the  character  aiMl  coets  of  tha  additions  and  bet- 
tenbAnti  made  mth.  or  in  connection  vith  this  loan  fen:  said  pnr- 
po8e&  The  loan  for  additions  and  betterments  shall  have  been  ex- 
pended or  definitely  obligated  for  the  purposes  for  which  loaned, 
or  shall  be  repaid  to  the  United  States,  on  or  before  July  1,  1921, 
In  event  tho  Commission  shall  certify  to  the  Secretary  of  the  Treas- 
ury Utat  the  appHcanthas  failed  or  refused  well  and  truly  to  com-' 
ply  with  any  one  or  more  of  the  terms  and  conditions  contained  in 
said  agreement,  the  whole  or  any  part  of  the  obligations  evidencing 
the  loan,  as  the  Commission  may  designate,  shall,  at  the  option  of  the 
bolder,  become  due  and  payable. 

'6.  That  the  proflpecfive  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnishes,  in  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor,  and  reason- 
able protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  un- 
able to  provide  itself  with  the  funds  necessary  for  the  aforesaid  pur- 
pose from  other  sources. 

Done  in  Washington,  D.  C^  this  18th  day  of  October,  1920. 

6fiLaa 


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SOO  INTBBSTATB  OOHICBBCB  OOMlflBSIOH  UVOnB. 

after  referred  to  as  the  applicant,  fm-  the  purpose'  of  aidmg  tiie  appti- 
cant  in  providing  itself  with  additions  and  Mtteimeto,  is  iwocMary 
to  enable  the  applicant  properly  to  meet  tiietnaeportaticta  needs  of 
the  public.  i 

2.  That  the  prospective  eamingpower  of  the  applicant  and  the 
character  and  value  of  the  seoarity  offered  are  snch  as  to  famish  rea- 
sonable assurance  of  the  applicant's  ability  to  repay  ihe  loan  wHhin 
the  time  fixed  therefor,  and  to  meet  its  other  obligations  in  connec- 
tion with  such  loan. 

S.  That  the  amount  of  the  loan  which  is  to  be  made  is  9800,000. 

4.  That  the  time  from  the  making  thereof  "within  'wtiich  the  loan  is 
to  be  repaid  in  full  is  15  years. 

5.  The  the  terms  and  conditions  of  the  loan,  mcloding  the  Meiurity 
to  be  given  for  repayment,  are : 

(a)  The  loan  shall  be  collaterally  secured  by  plMging' $300,000, 
principal  amount,  of  applicant's  first  and  general  mortgage  5- 
per  cent  50-year  series-A  gold  bonds,  due  May  1,  IIMSB,  issued  under 
an  indenture  of  mortgage,  dated  May  1,  1916,  executed  by  tbe  ap- 
plicant to  the  Guaranty  Trust  Company  of  New  York,  and  William 
L.  Taylor,  trustees,  the  same  being  300  bonds  in  denomination  of 
$1,000  and  numbered  4581  to  4630,  inclusive,  and  M69  to  5661,  in- 
clusive. 

(b)  The  applicant  may  repay  all  or  any  part  of  the  loan-before 
maturity.  The  collateral  security  shall  be  released  proportionately 
as  parts  of  the  loan  are  repaid. 

(o)  The  applicant  shall  on  demand  of  the  Secretary  of  the  Treas- 
ury, with  the  concurrence  of  the  Interstate  Commerce  -Commission, 
deposit  such  additional  security  as  may  be  from  time  to  time  re- 
quired ;  the  securities  pledged,  together  \tfith  any  that  may  be  pledged 
hereafter,  or  may  have  been  pledged  heretofore,  as  security  for  tliis 
loan  or  any  other  obligation  of  the  applicant  to  the  United  States  - 
for  loans  under  section  210  of  the  transportation  set,  1960,  as 
amended,  shall  be  applicable  in  like  manner  to  secure  the  repayment 
of  any  and  all  such  loans. 

(d)  The  applicant  has  agreed  in  an  instrument  in  writing,  dated 
the  28th  day  of  September,  1920,  Sled  with  the  InterEttate  Commerce 
Conunisaion,  to  the  following  conditions:  (1)  That  the  amount  to  be 
financed  by  it  in  connection  with  the  loan  shall  be  so  financed  that  the 
cost  to  it  of  any  loans  secured  from  sources  other  than  the  United 
States  government  shall  not  exceed  7J  per  cent  per  annum,  including 
in  such  cost  discounts,  attorneys'  fees,  and  ai^  and  aU<ott)ei  expenses 
in  connection  therewith ;  (2)  the  expenditures  made  from  the  loan 
for  additions  and  betterments  diall  be  confined  to  ^ch  expenditures 
as  may  be  chargeable  to  accouDte  for  iiiT^stmeiit  in  road  and  equfp- 

«Kj.c.a 


LOAB-'TO  GHIClieO.  UmiANAPOUS  «  UOVtSVlUJt  BY.         801 

ment  provided  in  the  Commission's  accounting  claeBification  for 
Btoam  roads  in  effect  at  the  time  the  expenditures  may  be  made;  and 
(8)  the  applicant  shall  famish  the  Commission  on  or  about  Janu- 
ary 1  and  July  1,  1921,  the  detailed  certificate  under  oath  of  its  chief 
u^ineer,  diowitig  the  cha^acCer'and  costs  of  the  additions  and  bet- 
tenbinti  made  with,  or  in  connection  with  tJiis  loan  for  said  par- 
poses.  The  loan  for  additions  and  betterments  shall  have  been  ex- 
pended or  definitely  obligated  for  the  purposes  for  which  loaned, 
or  shall  be  repaid  to  the  United  States,  on  or  before  July  1,  1921. 
In  event  the.  Commission  shall  certify  to  the  Secretary  of  the  Treas- 
xiry  Uiat  the  appUcant  has  -failed  or  refosed  welt  and  truly  to  com-' 
ply  with  any  one  or  more  of  the  terms  and  conditions  contained  in 
said  agreement,  the  whole  or  any  part  of  the  obligations  evidencing 
the  loan,  as  the  Commission  may  designate,  shall,  at  the  option  of  the 
holder,  become  due  and  payable. 

.  '6.  That  the  pmepective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnishes,  in  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor,  and  reason- 
able protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  un- 
able to  provide  itself  with  the  funds  necessary  for  the  aforesaid  pur- 
pose from  other  sources. 

Done  in  Washington,  D.  C,  this  19th  day  of  October,  1920. 

eBi.aa 


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INTERSTATE  COUBIEBOE  00UUI8SI0N  XBFOVIS. 


Finance  Dookbt  No.  984, 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  MAX* 
TON,  ALMA  &  SOUTHBOUND  BAILROAD  COMPANY 
FOB  A  LOAN. 


Bubmitted  Augutt  SI.  IBM.    Deatded,  Otslobm- 19.  im. 


Public  neceutt;  of  applicant's  line,  prospeCtiTe  eanriag  power,  and  Hcprttr 
offered,  taeld  not  to  JnatUy  the  loan  reftoeflteC   Applicatloa  deoled. 

A.  J.  MoKimnon  for  applicant. 

Keport  of  the  CouHiseioN. 
Division  4,  CoxMisBioNBRfl  Mbtbr,  Dahibu,  Eastiuk,  ahd  Pottbb. 
Bt  Division  4: 

The  MaxtoD,  Alma  A  Southbound  Bailroad  CmnpaDy,  a  carrier 
subject  to  the  interstate  commerce  act,  hereinafter  referred  to  as  the 
applicant,  on  August  31,  1920,  made- application  to  the  Interatate 
Commerce  Commission  for  a  loan,  in  accordance  witti  section  210  of 
the  transportation  act,  1920,  as  amended,  to  meet  its  maturing  in- 
debtedness. 

In  the  application,  the  applicant  sets  forth : 

1.  That  the  amount  of  the  loan  desired  is  $63,646.40. 

2.  That  the  purposes  of  the  loan  and  the  uses  to  which  it  will  be 
applied  are  as  follows :  To  enable  the  applicant  to  exercise  an  option, 
expiring  November  1,  1920,  for  purchase  of  leased  rail  from  the 
Seaboard  Air  Line  Railway,  $38,296.40;  to  enable  tbe  applicant  to 
meet  short-term  notes  aggregating  $80,250.00;  total,  $68,546.40. 

8.  That  the  security  offered  is  the  applicuit's  note,  vith  an  agree* 
meat  to  pledge  bonds,  when  bonds  shall  have  been  issued,  for  the 
amount  of  the  loan. 

The  applicant  operates  15.6  miles  of  main-line  railroad  extending 
from  Rowland  to  Alma,  N.  C,  at  which  latter  point  connection  is 
made  with  the  Seaboard  Air  Line  Railvray.  The  applicant's  line 
forms  one  ^de  of  a  triangle,  of  which  the  Seaboard  Air  Une,  be- 
tween Alma  and  Pembroke,  and  the  Atlantic  Coast  Ijne,  between 
Pembroke  and  Rowland,  make  the  other  two  sides.  Apparently  no 
part  of  the  line  is  more  than  about  6  or  7  miles  from  stations  on  Uie 
main-line  railroads. 

From  1916  to  1919,  inclusive,  the  deficit  in  net  income  of  tiie  appli- 
cant was  $13/)43.  From  January  to  July,  1920,  inclusive,  the  dsfieit 
in  net  income  was  $5,482, 


APFUCATION  OF  UAZTON,  ALMA  ft  SOtlTHBOirKD  FOR  LOAN.     SOS 

In  determining  the  value  of  the  securitj  offered,  the  proBpective 
earning  power  of  the  applicant  is  the  coatrolling  factor.  The  pros- 
pective  earning  power  of  the  applicant  beiitg  doubtful,  the  security 
offered  is  inadequate. 

We  find  that  the  public  necessity  for  the  applicant's  line  of  rail- 
road is  relatively  small.  We  find  further  that  the  prospective  earn- 
ing power  of  the  applicant  and  the  character  and  value  of  the  secur- 
ity offered  are  not  such  as  to  furnish  reasonable  assurance  of  the 
applicant's  ability  to  repay  the  loan  within  the  time  fixed  therefor, 
and  reasonable  protection  to  the  United  States. 

An  appropriate  order  will  be  entered  denying  the  application. 

ORDER. 

Full  investigation  of  the  matters  and  things  involved  in  said  ap- 
plication having  been  had,  and  the  said  Division  having,  on  the  date 
hereof,  made  and  filed  a  report  containing  its  findings  of  fact  and 
conclusions  thereon,  which  said  report  is  hereby  referred  to  and 
made  a  part  hereof : 

It  is  ordered.  That  the  said  application  be,  and  it  is  hereby,  denied. 

esi-cc 


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INTERSTATE  OOUUEBCB  C0UMIS5I0N   REPORTS. 


FiKAwcr  DocKFT  No.  TO. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  MAINE 
CENTRAL  RAILROAD  COMPANY  FOR  AUTHORITY  TO 

ISSUE  AND  PLEDGE  FIRST  AND  REFUNDING  MORT- 
GAGE BONDS. 


Submitted  September  C7, 19t0.    Decided  October  it,  19t0. 


Authority  granted  (1)  to  Isane  13,619,000  of  first  and  refunding  mortgage  6 
per  cent  gold  bonda.  aeries  D,  to  be  dated  December  1,  1915,  and  to  mature 
December  1,  1935;  (2)  to  pledge  {2,067,000  of  said  bonds  with  the  Secre- 
tai7  of  the  TreaButy  aa  eecnrltj  for  Uhidb  from  tbe  United  States;  (3)  to 
pledge  $1,1S2,000  of  aaid  bonds  as  aecarlt;  for  a  loan  for  tbe  financing  in 
part  of  certain  acquisitions  of  equipment,  additions,  and  betterments;  and 
(4)  to  pledge  $400,000  of  said  bonds  ae  security  for  a  loan  to  redeem  cer- 
tatn  bonds  of  tbe  Knox  &  Lincoln  Railway,  maturing  on  February  1,  1921. 
H.  M.  Verrill  for  applicant. 

Report  of  the  Cohhibsion. 
DiviBioN  4,  CoHHissioNXRs  Mbtxr,  Daniels,  Eastman,  and  Potter. 
Bt  Divibion4: 

The  Maine  Central  Railroad  Company,  a  conunon  carrier  by  rail- 
road engaged  in  interstate  commerce,  applies  for  authority  to  issue 
$4,000,000  of  6rst  and  refunding  mortgage  6  per  cent  gold  bonds, 
series  D,  herein  called  the  series-D  bonds,  and  to  pledge  them  as 
security  for  loans  from  the  United  States,  and  for  certain  other  pro- 
posed loans,  in  amounts  as  follows:  (1)  $1,800,000  to  secure  a  loan 
from  the  United  States  in  the  sum  of  $1,000,000,  under  section  210 
of  the  transportation  act,  1920,  as  amended,  to  reimburse  the  appli- 
cant in  part  for  moneys  expended  from  its  treasury  for  redemption 
of  $1,800,000  of  Penobscot  Shore  Line  Railroad  Company  mortgage 
4  per  cent  bonds;  (2)  $817,000  to  secure  a  loan  from  the  United 
States  of  $653,000,  under  section  210  of  the  transportation  act,  1920, 
as  amended,  to  assist  the  applicant  in  acquiring  new  equipment  and 
providing  additions  and  betterments  to  existing  equipment  and  to 
way  and  structures;  (8)  $1,162,000  to  secure  a  proposed  loan  to  en- 
able the  applicant  itself  to  finance  the  remainder  of  the  amount  neces- 
sary for  the  purposes  indicated  under  (2) ;  (4)  $400,000  to  secure  a 
loan  to  redeem  $400,000  of  Knox  &  Lincoln  Railway  mortgage  5  per 
cent  bonds,  which  mature  February  1,  1921;  and  (.5)  $331,000  to 
secure  a  proposed  loan  for  financing  further  equipment  or  additions 
and  betterments. 

6s  I.  G.  a 

Digitized  by  CCHII^IC 


BOmiS  or  UAINE  OBNTRAL  K.   B.  305 

The  first  and  refunding  mortgage,  dated  December  1,  1915,  made 
hy  the  applicant  to  the  Union  Safe  Deposit  &  Trust  Company  pro- 
vides for  the  issue  of  bonds  in  the  aggregate  amount  of  $25,000,000, 
of  which  $16,000,000  are  now  outstanding.  Under  section  3  of 
article  II,  $1,300,000  of  these  bonds  are  to  be  issued  for  the  purpose 
of  retiring  a  like  amount  of  4  per  cent  bonds  of  the  Penobscot  Shore 
Line  Railroad  Company,  and  $400,000  for  the  purpose  of  retiring  a 
like  amount  of  &  per  cent  bonds  of  the  Knox  &  Lincoln  Railway; 
and  under  section  4  of  article  II,  bonds  may  be  issued  for  the  purpose 
of  acquiring  property,  making  improvements,  refunding  the  appli- 
cant's obligations,  etc. 

The  Penobscot  Shore  Line  Railroad  Company  bonds  matured  on 
August  1,  1920,  and  have  been  purchased  by  the  applicant  with 
moneys  drawn  from  its  working  fund,  with  the  exception  of  $3,000, 
not  yet  presented.  It  is  proposed  to  pledge  $1,250,000  of  the  series-D 
bonds,  for  which  authority  is  asked,  with  the  Secretary  of  the 
Treasury  as  security  for  a  loan  of  $1,000,000  from  the  United 
States  under  section  210  of  the  transportation  act,  1920,  as  amended, 
to  be  used  to  reimburse  the  working  fund  of  the  applicant's  treasury, 
in  part,  for  moneys  drawn  therefrom  to  purchase  these  bonds  at 
maturity,  as  specified  in  our  certificate  No.  30,  the  original  intention 
to  pledge  $1,300,000  of  the  bonds  as  security  for  this  loan  having 
been  thus  modified. 

It  is  likewise  proposed  to  pledge  $817,000  of  the  series-D  bonds, 
for  which  authority  is  asked,  with  the  Secretary  of  the  Treasury, 
as  security  for  a  loan  of  $653,000,  from  the  United  States,  under 
section  210  of  the  transportation  act,  1920,  as  amended,  to  be  used 
in  providing  the  applicant  with  new  equipment  and  additions  and 
betterments  to  existing  equipment  and  to  way  and  structures,  as 
specified  in  our  certificate  No.  29. 

Additional  funds  will  be  required  for  the  financing  of  the  objects 
to  which  the  second-mentioned  loan  is  to  be  applied,  and  for  this 
purpose  the  applicant  proposes  to  negotiate  a  loan  from  other  sources 
and  to  pledge  as  security  therefor  $1,152,000  of  the  series-D  bonds, 
for  which  authority  is  asked.  This  proposed  loan  is  to  be  so  financed 
that  the  cost  to  the  applicant  shall  not  exceed  7  per  cent  per  annum, 
including  discount,  attorney's  fees,  and  any  and  all  other  expenses 
in  connection  therewith. 

The  applicant  also  proposes  to  negotiate  a  loan  in  the  sum  of 
$400,000,  for  the  purpose  of  redeeming  the  Knox  &  Lincoln  Railway 
bonds  which  mature  February  1,  1921,  and  to  pledge  as  security 
therefor  $400,000  of  the  series-D  bonds,  for  which  authority  is  asked. 

It  appears  that  the  specific  purpose  in  connection  with  additions 

and  betterments  to  the  applicant's  property  for  which  it  is  proposed 

W844'— 22— Vol  a 


306  INTERSTATE  OOUUEBOB  OOICHTSSIOIT  BBPOBTS. 

to  negotiate  a  further  loan,  and  pledge  as  aecmitr  therefor  $381,000 
of  the  series-D  bonds,  has  not  yet  been  dflt«rmined.  Action  thereon 
■will  therefore  be  deferred. 

The  application  was  made  in  such  form  and  contained  such  mat- 
ters as  the  Commission  prescribed-  It  is  under  oath  and  was  signed 
and  filed  by  an  executive  officer  of  the  applicant  duly  designated 
for  that  purpose.  As  required  by  section  20a,  notice  of  the  filing 
of  the  application  has  been  given  to,  and  a  copy  thereof  filed  with, 
the  governor  of  each  state  in  which  the  applicant  operates,  Jfo 
objection  to  the  granting  of  the  application  has  been  made. 

Upon  consideration  of  the  record,  we  find  that  the  proposbd  issue 
by  the  applicant  of  $3,61d,000  of  first  and  refunding  mcNrtgage  6 
per  cent  gold  bonds,  series  D,  the  pledge  of  $2,067,000  thereof  with 
the  Secretary  of  the  Treasury,  and  the  pledge  of  $1,552^000  thereof 
to  secure  loans  from  other  sources  as  above  indicated  (a)  are  for 
lawful  objects  within  its  corporate  purposes,  and  compatible  with 
the  public  interest,  which  are  necessary  and  appropriat«  for  and 
consistent  with  the  proper  performance  by  it  of  service  to  the  public 
as  a  common  carrier,  and  which  will  not  impair  its  ability  to  perform 
that  service;  and  (b)  are  reasonably  necessary  and  appropriate  for 
such  purpose. 

An  appropriate  order  will  be  entered. 

ORDER. 

Investigation  of  the  matters  and  things  involved  in  this  proceeding 
having  been  had,  and  the  said  Division  having,  on  the  date  hereof, 
made  and  filed  a  report  containing  its  findings  of  fact  and  conclu- 
sions thereon,  which  report  is  hereby  referred  to  and  made  a  part 
hereof: 

li  is  ordered,  That  the  Maine  Central  Railroad  Company  be,  and  it 
is  hereby,  authorized  (1)  to  issue  as  of  the  date  of  December  1, 1915, 
$3,619,000  of  first  and  refunding  mortgage  gold  bonds,  series  D,  the 
same  to  be  issued  under  and  pursuant  to,  and  to  be  secured  by,  the 
first  and  refunding  mortgage,  dat«d  December  1,  1915,  made  by  the 
applicant  to  the  Union  Safe  Deposit  &  Trust  Company,  a  copy  of 
which  is  filed  with  the  application ;  said  bonds  to  bear  interest  at  the 
rate  of  6  per  cent  per  annum,  payable  suniannually,  on  the  1st  day 
of  June  and  of  December,  in  each  year,  the  first  installment  of  inter- 
est to  be  paid  December  1,  1920,  and  the  principal  thereof  to  be  pay- 
able on  the  1st  day  of  December,  19S5;  said  bonds  to  be  subject  to 
redemption  and  to  be  registrable,  as  provided  in  said  first  and  re>fund- 
ing  mortgage ;  said  bonds  to  be  issued  in  the  forms  submitt«d  with 
the  application;  (2)  to  pledge  $2,067,000  of  said  bonds  with  the  Sec- 
retary of  the  Treasury  as  security  for  loans  from  the  United  States 

« I.  C.  a 


BOIHJS  OF  MAINE  OBNTBAL  B.   B.  807 

under  section  210  of  the  transportation  act,  1920,  aa  amMided,  as 
follows:  $817,000  as  security  for  a  loan  in  the  sum  of  $658,000,  to 
enable  applicant  to  procure  additional  new  equipment  and  to  mate 
improvements  to  the  equipment  and  road  of  the  applicant,  as  specified  ■ 
in  tliis  Commission's  certificate  Hh.  29;  and  $1,2*0,006  as  security 
for'a loan  of  $1,000,000,  to  reimburse  the  working  fuBd  of  the  aK>Ii- 
cantV  tt-rfaSury,  in  part,  for  moneys  drawn  therefrom  to  pay  cer^dn 
4  p6r  cent  bonds  of  the  Penobscot  Shore  Line  Railroad  Company 
whi<*i  matcfred  August  1, 1920,  as  specified  in  this  Commission's  cw- 
tificate  No.  80;  (gy  to  pledge  $1,152,000  of  siud  bonds  as  security  for 
a  loan  to  be  negotiated  by  the  applicant  for  the  purpose  of  providing 
the  remainder  of  funds  necessary  to  procure  addi^onal  now  equip- 
ment and  to  make  improvementfi  to  the  equipment  and  road  of  the 
applicant  as  aforesaid,  the  amount  of  such  loan  to  be  so  financed 
that  the  cost  thravof  to  the  applicant  shall  not  exceed  7  per  cent  per 
annbm,  including  in  such  coet  discount,  attorneys'  fees,  and  any  and 
all  other  expeiises  in  connection  therewith,  m  specified  in  certificate 
No.  29  of  this  Commission;  and'  (4)  to  pledge  $400,000  of  said  bonds 
as  security  for  a  loan  to  be  negotiated  by  the  applicant  for  the  purpose 
of.  redeenuDg  $400,000  of  Knox  &  Lincoln  Railway  mortgage  6  per 
cent  bonds,  which  matnn  February  1, 1921,  and  which  are  oblivions 
of  the  applicant;  said  bonds  to  be  nsed  solely  as  {FUch  security  until 
otherwise  ordered  by  this  Commis^on. 

It  is  further  ordered,  That  said  first  and  refunding  mortgage  6 
per  cent  gold  bonds,  herein  authorized  to  be  issued,  shall  not  be  sold, 
disposed  of,  pledged,  repledged,  or  otherwise  used  for  any  pur- 
pose OK  in  any  mannep  other  than  as  authorized  in  this  order. 

It  is  furtiar  ordered,  That  said  applicant  shall  make  report  to  this 
Commission  of  the  issue  and  pledge  of  bends  as  herein  authorized, 
Within  10  diiy«  after  the  same  shall  have  been  so  issued  and  pledged; 
and  that  said  applicant  shall  bIbq  make  report  of  the  release  of  said 
bonds  from  suc^  pledges  within  10  days  after  each  or  any  of  the  same 
shajl  haT9  been  so.  released. 

<  And  m^  further  ordered,  That  nothing  herein  shall  be  construed 
to'imply  any  guaranty  or  obligation  as  to  said  first  and  refunding 
mortgage  6  per  cent  gold  bonds,  or  interest  thereon,  on  the  part  of  the 
United  States. . 

86 1.  C.  c. 


D,=;,lz...,C00gIC 


INTEBSTATB  OOHHIBOB  OOHBflSfflOH  BBPOBIS. 


Finance  Docket  No.  37. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  CHX- 
CAGO,  ST.  PAUL,  MINNEAPOLIS  A  OMAHA  RAILWAY 
COMPANY  FOR  AUTHORITY  TO  SELL  OR  PLEDGE 
EQUIPMENT -TRUST  CERTIFICATES,  AND  TO  AS- 
SUME PAYMENT  OF,  AND  TO  SELL  OB  PLEDGE  PEO- 
POSED  EQUIPMENT-TRUST  CERTIFICATES. 


AibmttMd  SoplemtOT- 1^,  1US9.    D«tiU«d  0<iltt1>9r  ft,  lUO. 


AntboritT  granted:  (1)  To  aell  at  par  (770,000  of  aerlM-A,  1917,  eqnlpoMBt- 
tnut  certlfintM,  bearing  Interest  at  the  rate  of  7  per  cent  per  annum, 
heretofore  Issued  under  tte  Chicago,  St.  Paul,  Ulnneapolla  &  Omaha  Rall- 
>oad  Company  eqnlpnwnt-tmet  of  1917,  but  now  Id  the  treasutr  of  th« 
applicant;  (2)  to  assume  the  obligation  of  paying  principal  and  Interest 
of  {SSO.OOO  of  serles-B  1020  eqnlpment-tnist  certlflcateB,  to  be  tsaiied  bjr 
tbe  trustee  nnder  the  said  eqntpment-trnst  aKreement.  by  execution  of 
lease  of  certain  equipment;  and  (S)  to  sell,  at  97  per  cent  of  par,  or 
better,  said  1960,000  of  series-B  1S20  equlpmeat-tmst  certificatea. 
James  B.  Sheean  for  spplicant 

BzrORT  or  thk  Cohhission. 
DiviBioN  4,  CoMMiaaioNxRs  Metkb,  Danieia,  Easthak,  and  Pormt, 
Bt  DmaioN  4: 

The  Chicago,  St.  Paul,  Minneapolis  &  Omaha  Railway  Company, 
a  common  carrier  by  railroad  engaged  in  interstate  commerce,  seeks 
authority  under  section  20a  of  the  interstate  commerce  act  to  sell 
at  par  certain  equipment-trust  certificates,  known  as  aeries  A,  1917, 
in  the  aggregate  amount  of  $770,000,  and  which  are  now  in  the 
treasury  of  the  applicant,  or  to  pledge  said  series-A  1917  certificates 
as  collateral  for  a  loan  or  loans,  for  the  purpose  of  reimbursing  thi 
treasury  of  the  applicant  for  moneys  advanced  to  the  vendors  out 
of  income  in  procurement  of  certain  equipment ;  also  to  assume  the 
obligation  of  paying  the  principal  and  interest  of  equipment-tntst 
certificates,  in  the  aggregate  amount  of  $950,000,  to  be  known  as 
series  B,  1920,  proposed  to  be  issued  by  ibe  trustees  under  the  Chi- 
cago, St  Paul,  Minneapolis  &  Omaha  Bailway  equipment  trust  of 
1917,  dated  February  6, 1917,  and  amended  June  1, 1920,  and  to  sell 
the  series-B  certificates  at  97  per  cent  of  par,  or  better,  or  to  pledge 
them  as  collateral  for  a  loan  or  loans  for  the  purpose  of  reimbursing 
the  treasury  of  the  applicant  for  moneys  to  be  used  in  procurement 
of  10  engines  and  12fi  stock  cars.  The  application  was  made  in  such 
form  and  contained  such  matters  as  the  Commission  prescribed. 

60LO.O. 


CBBTIFICATES  OP  CHICAGO,  ST.  PAUL^  MINNEAPOLIS  ±  OICAHA  BT.   809 

It  appears  that  od  February  S,  1917,  an  agreement  was  entered 
into  between  John  D.  Caldwell,  Charles  Jensch,  Charles  P.  Nosh, 
and  W.  H.  Thorn,  called  vendors,  the  Farmers'  Loan  &  Trust  Com- 
pany and  Edwin  S.  Marston,  called  trustees,  and  the  applicant, 
called  in  said  agreement  "Railway  Company,"  but  called  herein 
the  applicant,  under  which  the  vendors  are,  from  time  to  time,  to 
deliver  to  the  trustees  such  equipment  as  the  applicant  may  request. 
Upon  the  receipt  of  the  equipment  the  trustees  are  to  issue  certificates 
to  an  amount  not  to  exceed  the  cost  of  the  equipment  so  delivered. 
The  aggregate  amount  of  the  certificates  to  be  issued  is  not  to  exceed 
$5,000,000.  The  certificates  were  to  bear  interest  at  the  rate  of  6 
per  cent  per  annum.  Provision  was  made  for  the  issue  of  certificates 
in  series,  to  be  designated  by  a  serial  number  or  letter  and  by  its 
year  of  issue,  certificates  to  the  amount  of  one-tenth  of  each  series 
to  become  due  and  payable  at  the  expiration  of  eadi  year  succeeding 
the  date  of  such  series,  so  that  each  series  of  certificates  shall  be 
fully  paid  in  10  years  after  ite  issue.  By  a  supplemental  agreement 
dated  June  1,  1920,  between  the  same  parties,  it  is.  provided  that 
the  certificates  thereafter  issued  shall  bear  interest  at  a  rate,  to 
be  determined  by  the  board  of  directors  of  the  applicant,  not  exceed-. 
ing  7  per  cent  per  annum,  and  that  unmatured  certificates  of  series  A, 
1917,  shall  from  and  after  June  1, 1920,  bear  interest  at  the  rate  of 
7  per  cent  per  annum. 

Equipment  which  coat  $1,111,072.48  jn  1917  is  now  in  the  pos- 
session of  the  applicant  as  lessee  of  the  trustee  pursuant  to  the  terms 
of  the  aforesaid  equipment  trust.  In  procuring  this  equipment  the 
applicant  advanced  funds  for  that  purpose  to  the  vendors,  who 
thereby  became  obligated  to  refund  the  amount  of  the  advaiv»  to 
the  applicant.  Upon  obtaining  the  equipment  the  vendors  conveyed 
the  tide  to  the  trustees,  who  thereupcm  issued  certificate  numbered 
1  to  1100,  inclusive,  series  A,  1917,  aggregating  $1^00,000.  The 
trustees  then  leased  the  equipment  to  the  applicant  in  consideration 
of  the  agreement  of  the  applicant  to  pay  the  prinoipal  and  interest 
of  the  certificates.  Upon  their  issue  by  the  trustees,  the  certificates 
were  turned  over  to  the  applicant  cax  the  (H^ier  of  the  vendors. 

Of  said  1100  series-A  ldl7  certificates,  Nos.  1  to  220,  inclusive, 
have  been  retired,  canceled,  and  released;  Kos.  SStl  to  830,  inchi^ve, 
it  is  stated,  will  be  retired  and  canceled  on  Deoember  1,  1920;  and 
Nob.  381  to  1100,  iadusive,  the  ^gregttte  amount  of  which  is  $770,000, 
are  proposed  to  be  sold  at  par  pursuant  to  authority.  r^Mested  in 
the  applieatioD,  thereby  rumbursing  the  treasury  ,of  the  applic^t 
to  that  extent  for  a  portion  of  the  moneys  advfmced  in  1917  to  the 
vendors  and  used  by  them  in  obtaining  the  equipment..  . 

tsi.aa 


D,=;,lz...,C00gIC 


310  INTERSTATE   COMMERCE   COMMISSION  REP0BT6. 

In  addition  to  the  equipment  heteinbef  ore  ref  srred  to,  the  applicant 
desires  to  acquire  equipment  in  the  manner  provided  in  the  equip- 
ment trust  of  February  5, 1917,  as  Idllows :  6  mikado  ffeight  engines, 
estimated  cost  $434,700;  4  switch  engines,  $185,600;  125  stock  caie, 
$842,600;  total,  $962,800. 

It  appears  that  tonnage  carried  by  the  applicant  in  1919  was 
about  29  per  cent  greater  than  in  1913,  while  the  number  of  locomo- 
tives increased  by  about  4  per  cent ;  also,  that  while  live-stock  ton- 
nage constitutes,  at  present,  about  5  per  cent  of  all  tonnage,  stock 
cars  are  used  for  a  diversity  of  pnrposes,  such  as  transportation  of 
coal  and  products  of  forests,  agriculture,  and  other  sources,  and 
that  the  territory  served  by  the  carrier  is  gradually  tumihg,  fVom 
year  to  year,  to  Uve-stock  production,  which  tends  appreciably  to 
increase  its  annual  stock-car  requiremetits.  The  applicant  prefers 
to  proceed  on  its  own  credit  and  resources  rather  than  to  apply  to 
the  government  for  assistance. 

The  method  to  be  employed  in  obtaining  this  equipment  .will  be 
the  same  as  that  used  in  1917.  Gertificntes  to  be  known  as  series  B, 
1920,  amounting  to  $950,000,  will  be  issued.  The  applicant  will  be- 
come obligated  to  pay  to  the  Farmers'  IjOan  &  Trust  Company  an 
annual  sum  equal  to  one-tenth  of  the  principal  of  the  proposed  aeriee- 
B  1920  certificates,  together  with  the  interest  cm  the  certificates  at 
the  rate  of  7  per  cent  per  annum.  The  series-B  certificates  TVill  be 
dated  January  1, 1920,  will  be  for  $1,000  each,  and  wiU'  be  nonabered 
teom  1  to  960,  inclusive.  The  interest  will  be  pay^le  semiannnally 
on  January  1  and  July  1  of  each  year. 

It  was  represented  that  the  series-B  certificates  can  probably  be 
SGJtd  for  97  per  cent  of  par,  or  better.  It  does  not  appear,  however, 
that  negotiations  have  been  had  for  the  making  of  ahy  loans  to  be 
gecured  by  the  pledge  of  either  the  series-A  or  sefies-B  certificates. 

The  application  was  made  under  oath,  ngned,  and  filed  on  behalf 
of  the  applicant  by  one  of  its  executive  officers  duly  designated  for 
that  purpbse.  Notioe  of  the  filing  of  the  applicatiMi  has  been  given 
to,  and  a  copy  thereof  filed  with,  the  governor  of  each  of  t^e  states 
in  which  the  applicant  oper&tea,  and  no  objection  to'  ^le  issue  by 
this  Commission  of  an  order  granting  the  application  has  been 
offered  by  any  state  authoiif^. 

Upon  consideration  of  the  record,  we  find  that  the  proposed  sale 
of  the  mries-A  1917  certiflciLtes;  the  proposed  assimiptMn  of  pay- 
ment of  the  principal  and  interest  of  the  Beiie»-B  19S&  oertifioateSi 
to  ba  issued  in  connection  with  the  procnrement  of  the  aforesud 
engines  and  stock  cars,  and  the  proposed  s»le  oftiie  series-B  .li)80 
certificatM  (a)  are  for  lawfsl  objects  within  the  corporate  porposes 
of  the  Chicago,  St.  Paul,  Minneapolis  &  Omaha  Bailway  Onnpany, 

6i.aa 


,,  CcHH^Ic 


CEBTIFICATBS  OF  CHICAGO,  ST.  PAUL,  MINNEAPOLIS  A  OMAHA  BY.   311 

and  compatible  with  the  public  interest,  which  are  QecesBary  and 
appropriate  for  and  consistent  with  the  proper  perforniance  by  it  of 
seirics  to  the  public  as  a  common  carrier,  and  which  will  not  impair 
its  ability  to  perform  that  service;  and  (b)  are  reasonably  necessary 
for  such  purposes. 
An  appropriate  order  will  be  entered. 

ORDER. 

A  hearing  having  been  held  on  this  application  and  full  investi- 
gation of  the  matters  and  things  involved  therein  having  been  had, 
and  the  said  Division  having,  on  the  date  hereof,  made  and  filed  a 
report  containing  its  findings  of  fact  and  conclusions  thereon,  which 
report  is  hereby  referred  to  and  made  a  part  hereof : 

It  is  ordered,  That  the  Chicago,  St,  Paul,  Minneapolis  &  Omaha 
Railway  Company  be,  and  it  is  hereby,  authorized  to  sell,  for  not 
less  than  par,  series-A  1917  equipment-trust  certificates  numbered 
331  to  1100,  inclusive,  the  aggregate  face  value  of  which  is  $770,000, 
the  proceeds  of  such  sale  to  be  used  to  reimburse  the  treasury  of 
the  applicant,  in  part,  for  moneys  advanced  in  1917  to  the  vendors 
of  certain  equipment  procured  by  the  applicant  under  a  lease  in 
pursuance  of  a  certain  trust  agreement  known  as  the  Chicago,  St. 
Paul,  Minneapolis  &  Omaha  Railway  equipment  trust  of  1917,  dated 
February  5,  1917. 

/*  is  further  ordered.  That  the  Chicago,  St.  Paul,  Minneapolis  & 
Omaha  Railway  Company  be,  and  it  ia  hereby,  authorized  (1)  to 
assume  the  obligation  of  paying  to  the  Farmers'  Loan  &  Trust  Com- 
pany an  annual  sum  equal  to  one-tenth  of  the  principal  amount  of 
series-B  1920  certificate  and  the  interest  payable  thereon  from  time 
to  time  at  the  rate  of  7  per  cent  per  annum,  such  payments  being, 
with  the  payment  of  other  incidental  expenses,  the  annual  rental 
for  the  use  of  the  equipment  described  in  the  report,  in  accordance 
with  the  terms  of  a  proposed  lease  agreement  between  the  appli- 
cant and  the  Farmers'  Lran  &  Trust  Company  and  Edwin  S.  Mars- 
ton,  ae  biistees,  a  tentative  copy  of  which  has  been  filed  with  the 
application  and  the  execution  of  which  is  provided  for  in  the  trust 
agreement  of  February  6, 1917 ;  the  rentals  so  paid  by  the  applicant 
to  be  applied  in  payment  of  the  principal  of  said  series-B  1920  cer- 
tificates and  the  interest  thereon  as  the  same  shall  become  due  and 
payable;  and  (2)  to  sell  at  97  per  cent  of  par,  or  better,  series-B 
1920  equipment-trust  certificates  numbered  1  to  950,  inclusive,  the 
aggregate  face  value  of  which  is  $960,000,  the  proceeds  of  such  sale 
to  be  used  to  reimburse  the  treasury  of  the  applicant,  in  part,  for 
moneys  which  may  hereafter  be  advanced  to  the  vendors  of  the 
equipment  described  in  the  application  to  be  procured  by  the  appli- 
ed L  c.  a 


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912  INTEB5TATE   COMtORCB  COUAOSBION  BGFOBTS. 

cant  under  a  lease  in  pursuance  of  the  aforesaid  trust  agreement  of 
February  6, 1917. 

It  it  fwther  ordered.  That  if  said  series-A  1917  equipment-buBt 
certificates,  of  the  principal  amount  of  $770,000,  shall  be  sold  at 
such  price  as  to  realize  net  proceeds  of  more  than  $770^000,  and/or 
if  said  series-B  1920  equipment-trust  certificates,  of  the  principal 
amount  of  $960,000,  shall  be  sold  at  such  price  as  to  realize  net  pro- 
ceeds of  more  than  $921,500,  no  portion  of  the  net  proceeds  of  such 
sale  in  excess  of  the  sums  specified  shall  be  used  for  any  purpose 
without  the  consent  of  the  Commission, 

It  is  further  ordered.  That  none  of  the  said  series-A  1917  equip- 
ment-trust certificates  herein  authorized  to  be  sold,  nor  any  of  said 
series-B  1920  equipment-trust  certificates  herein  authorized  to  be 
issued  and  sold,  shall  be  hypothecated  or  pledged  as  collateral  unless 
any  such  pledge  or  hypothecation  shall  have  been  expressly  approved 
and  authorized  by  this  Commission. 

It  is  further  ordered,  That  the  Chicago,  St.  Paul,  Minneapolis 
&  Omaha  Railway  Company  shall  make  report  to  this  CommissioQ 
of  the  sale  of  said  series-A  1917  equipment-trust  certificates,  and  of 
said  series-B  1920  equipment-trust  certificates,  within  10  days  after 
the  same  shall  have  been  sold,  stating  all  the  facts  in  connection 
therewith  and  pertinent  thereto,  and  shall,  for  each  six  months'  period 
ending  June  30  and  December  31,  file  not  more  than  30  days  from 
the  end  of  such  period  a  verified  report  showing  (a)  what  certificates 
have  been  sold  or  otherwise  disposed  of  during  such  period;  (&) 
date  of  such  sale  or  disposal;  {c)  to  whom  such  certificates  were 
sold;  (d)  what  proceeds  were  realized  from  such  sale;  (e)  any 
other  terms  and  conditions  of  such  sale;  and  {/)  the  amount 
of  the  proceeds  of  series-B  1920  certificates  expended  during  such 
period,  and  stating  to  what  account  or  accounts  such  expenditures 
have  been  charged;  and  continue  to  file  such  reports  imtil  all  said 
certificates  shall  have  been  sold  or  disposed  of  and  the  proceeds 
expended  in  accordance  with  the  authority  contained  herein,  and  if 
during  any  period  no  certificates  were  sold  or  disposed  of  or  pro- 
ceeds expended,  the  report  shall  set  forth  such  fact. 

And  it  is  fwther  ordered.  That  nothing  herein  shall  be  construed 
to  imply  any  guaranty  or  obligation  as  to  said  series-A  1917  equip- 
ment-trust certificates,  or  interest  thereon,  or  as  to  said  series-B  1920 
equipment-trust  certificates,  or  interest  thereon,  on  the  part  of  the 
United  States. 

65LC.C. 


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ILLINOIS  CENTRAL  EQUIFUEKI  TBXSBT. 


Finance  Docket  No.  81. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  ILLI- 
NOIS CENTRAL  RAILROAD  COMPANY  FOR  AUTHOR- 
ITY TO  EXECUTE  ILUNOIS  CENTRAL  EQUIPMENT 
TRUST. 


SubmUUd  October  19,  I'JtO.    Decided  October  S2,  1920. 


Autborlty  granted:  (1)  To  esecnte  and  deliver  certain  aKreemeats  and  to 
assume  obUcatloD  to  pay  ¥8,107,000  of  iS-jear  cqulpment-tmst  gold  cer- 
ttflcates  and  attached  dividend  warrants,  to  be  known  as  lUinola  Oeotral 
eqalpment'trust  certlflcates,  series  F,  In  the  procurement  of  certain  eqnlp- 
ment;  (2)  to  sell  said  trnst  certificates  at  not  less  than  97.38  per  cent  of 
their  fac«  valne,  and  accrued  interest;  and  (3)  for  tbe  application  of  the 
proceeds  ot  said  traat  certlflcatee  by  aaid  trustee  toward  tbe  purcbaae  ot 
certain  equipment  q>eclfled  In  tbe  application. 
if.  p.  Blauvelt  for  applicant. 

Repobt  of  the  Cohmissiok. 
Division  4,  Cohhissionebs  Meter,  Daniels,  Eastuan,  and  Pottbb. 
By  Division  4 : 

Tbe  Illinois  Central  Railroad  Company,  a  common  carrier  by 
railroad  engaged  in  interstat«  commerce,  applies  for  autbority 
under  section  20a  of  the  interstate  conmierce  act  to  execute  and 
deliver  a  certain  agreement  dated  October  1,  1920,  witb  Harry  E. 
Sighter  and  Andrew  S.  Hannum,  as  vendors,  by  and  under  the 
terms  of  which  the  applicant  obligates  itself  to  pay  $8,107,000  of 
16-year  equipment-trust  gold  certificates  and  attached  warrants  to 
be  issued  tiiereunder,  the  proceeds  of  which  are  to  be  used  toward  tbe 
procurement  of  new  equipment  as  detailed  in  the  application. 

The  agreement  provides  that  in  consideration  of  tbe  sum  of 
$13,515,918  tbe  vendors  are  to  convey  to  the  trustee  the  equipment 
and  the  trustee  is  then  to  execute  a  lease  of  the  equipment  to  tbe 
applicant,  which  agrees  thereunder  to  obligate  itself  to  pay  tbe 
principal  of  said  equipment-trust  certificates  and  interest  thereon 
as  they  become  due  and  payable.  These  certificates  are  to  bear 
interest  at  the  rate  of  7  per  cent  per  annum,  payable  semiannually 
on  April  1  and  October  1  of  each  year,  and  are  to  mature  serially, 
the  first  in  the  principal  sum  of  $737,000  on  October  1,  1925,  and 
a  like  principal  sum  on  each  succeeding  October  1  until  all  have 
matured.  Kuhn,  Loeb  &  Company  of  New  York  have  agreed  to 
purchase  the  entire  issue  at  97.36  per  cent  of  par.  No  commission 
will  be  paid  for  the  sale  and  no  other  expenses  will  be  incurred. 

«si.aa 

r,K:,iz...,C00gIc 


314  INraKSTATE  COMMEBOa  COMMISSION  BEP0ET8. 

Of  the  remainder  of  the  total  cost  of  this  equipment,  $4,440,000 
will  be  paid  from  a  loan  for  that  purpose  from  the  United  States 
under  section  210  of  the  transportation  act,  1920,  as  amended,  and 
^he  remainder  will  be  paid  from  the  applicant's  current  income. 

The  application  was  made  in  such  form  and  contained  such  mat- 
ters as  we  prescribed.  It  was  made  xmder  oath,  signed,  and  filed 
on  behalf  of  the  applicant  by  one  of  its  executive  officers  duly  des- 
ignated for  that  purpose  by  the  applicant.  Notice  of  the  filing  of 
the  application  has  been  given  to,  and  a  copy  thereof  filed  with,  the 
governor  of  each  of  tHe  states  in  which  the  applicant  operates.  No 
objection  to  the  granting  of  the  application  has  been  offered  by  any 
state  authority. 

Upon  consideration  of  the  record,  we  find  that  the  proposed  as- 
sumption of  obligation  on  and  under  the  equipment-trust  certifi- 
cates aforesaid  by  the  Illinois  Central  Kailroad  Company  (a)  is 
for  a  lawful  object  within  its  corporate  purposes,  and  compatible 
with  the  public  interest,  which  is  necessary  and  appropriate  for 
and  consistent  with  the  proper  performance  by  it  of  service  to  the 
public  as  a  common  carrier,  and  which  will  not  impair  its  ability 
to  perform  that  service,  and  {b)  is  reasonably  necessary  and  appro- 
priate for  such  purpose. 

An  appropriate  order  will  be  entered. 

ORDER. 

Full  investigation  of  the  matters  and  things  involved  in  this 
application  having  been  had,  and  the  said  Division  having,  on  the 
date  hereof,  made  and  filed  a  report  containing  its  findings  of  fact 
and  conclusions  thereon,  which  report  is  hereby  referred  to  and 
made  a  part  hereof : 

/(  is  ordered,  That  the  Illinois  Central  Railroad  Q)mpany  be, 
and  it  is  hereby,  authorized  to  execute  and  deliver  a  certain  agree- 
ment dated  October  1,  1920,  with  Harry  E.  Bighter  and  Andrew 
S.  Hannum,  as  vendors,  and  the  Commercial  Trust  Company,  as 
trustee,  a  copy  of  which  has  been  filed  with  this  application,  and 
a  certain  agreement  of  lease  with  the  Commerciai  Trust  Company, 
a  copy  of  which  is  also  on  file  with  this  application,  to  be  called 
Illinois  Central  equipment  trust,  series  F,  by  and  under  the  terms 
of  which  the  Illinois  Central  Railroad  Company  obligates  itself  to 
pay  $8,107,000,  principal  amount,  of  16-year  equipment-trust  gold 
certificates  and  attached  dividend  warrants  to  be  issued  there- 
under by  the  trustee  aforesaid,  said  certificates  to  be  known  as 
Illinois  Central  equipment-trust  certificates,  aeries  F,  to  mature 

esLaa 


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ILUHOIS  OBNTEAL  BQ0IPMBNT  TRUST.  816 

first  series  to  msture  October  1,  19S5,  and  the  remain- 
1  the  iBt  day  of  October  of  each  year  thereafter,  re- 
I  and  including  October  1,  1935,  and  to  be  signed  and 
e  trustee  aforesaid,  bearing  interest  at  the  rate  of  7 

annum,  payable  semiannually  on  the  1st  day  of  April 
>er  in  each  year,  as  evidenced  by  said  attached  dividend 

as  set  forth  in  said  agreement. 

»■  ordered,  That  said  equipment-trust  certificates  of  the 
lOiint  of  $6,107,000  shall  be  sold  at  not  lees  than  97.36 
heir  face  value,  and  accrued  interest. 
er  ordered,  That  said  equipment-trust  certificates  herein 
if  the  total  face  value  of  $8,107,000  (or  the  proceeds 
ill  be  applied  by  said  trust«e  solely  and  exclusively 
lent  for  the  equipment  set  forth  in  the  aforesaid  lease, 

Bstlmated  coat. 

light  locomotlTeB $A.  385, 000 

isenger  locomotives 1,623,120 

1  dlDlDg  car* 2SS,  02S 

inrban  coacbes 097, 600 

ipartiDent  coaches 438, 468 

el  bagKoge  cars 461,700 

at  cars 474, 000 

refrigerator  caw 4, 256, 000 

■oose  care 160, 000 

ock  care 876, 000 

her  ordered,  That  if  said  certificates  of  the  principal 
SS,107,000  shall  be  sold  at  such  price  as  to  realize  net 
more  than  $7,892,976.20,  no  portion  of  the  proceeds  of 
excess  of  the  last-named  sum  shall  be  used  for  any  pur- 
;  the  further  order  of  this  C3ommis8ion. 
er  ordered,  That  none  of  said  certificates  herein  author- 
)  hypothecated  or  pledged  as  collateral  unless  any  such 
ypothecation  shall  have  been  expressly  approved  and 
ly  the  Commission. 

«r  ordered,  That  the  Illinois  Central  Railroad  Company 
:h  six  months'  period,  ending  June  30  and  December  31, 
e  than  80  days  from  the  end  of  such  period  a  verified 
ing  (a)  what  certificates  have  been  sold  or  otherwise 

during  such  period  in  accordance  with  the  authority 
)rein;  {b)  the  date  of  such  sale  or  disposition;  (c)  to 
certificates  were  sold ;  {d)  what  proceeds  were  realized 
lale;  («)  any  other  terms  and  conditions  of  such  sale; 

amount  expended  in  reasonable  detail  of  the  proceeds 


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816  INTEBSTATB  OOUMBROB  CX)UMI8BI0K  BBPOBIS. 

of  the  certificates  herein  authori^  for  the  purposes  specified  heran 
during  such  period,  and  stating  to  what  account  or  accounts  Botix 
espenditureB  have  been  charged;  and  continue  to  file  such  reports 
until  all  of  said  certificates  shall  have  been  sold  or  disposed  of  and 
the  proceeds  expended  in  accordance  with  the  authority  oontained 
herein,  and  if  during  any  period  no  certificates  were  sold  or  disposed 
of  or  proceeds  expended  the  report  shall  set  forth  such  fact 

And  it  it  further  ordered^  That  nothing  herein  shaU  be  construed 
to  imply  any  guaranty  or  obligation  as  to  said  equipment-trust  cer- 
tificates, or  interest  thereon,  <hi  the  part  of  the  United  States. 

ttitaa 


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loan  to  erie  r.  b.  317 

Finance  Docket  No,  954. 
IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  EKIE 
RAILROAD  COMPANY  FOR  A  LOAN  FROM  THE  UNITED 
STATES  TO  PROVIDE  EQUIPMENT  AND  OTHER  ADDI- 
TIONS AND  TO  MEET  MATURITIES. 


Submitted  October  12,  1920.    Decided  October  ££.  ISM. 


Application  granted  In  part  and  loan  of  $1340,700  approved. 

George  F.  Brovmell  for  applicant. 

Report  of  the  Couhibsion, 
Division  4,  Cohhissioners  Meter,  Daniels,  Eastman,  and  Potteh. 
Bt  Division  4: 

Tie  Erie  Railroad  Company,  a  carrier  by  railroad  subject  to  the 
interstate  commerce  act,  hereinafter  referred  to  as  the  applicant, 
on  May  26, 1920,  made  application  to  the  Interstate  Commerce  Com- 
mission for  a  loan  from  the  United  States,  in  accordance  with  section 
210  of  the  transportation  act,  1920,  to  provide  itself  with  new  and 
reconstructed  equipment,  to  make  betterments  to  existing  equipment 
and  additions  and  betterments  to  way  and  structures,  and  to  meet 
maturities.  On  June  19,  June  26,  July  13,  August  9,  and  October  12, 
1920,  the  applicant  amended  and  supplemented  the  application. 

In  the  application,  as  amended  and  supplemented,  the  applicant 
sets  forth : 

1.  That  the  amount  of  the  loan  desired  is  $30,663,309. 

2.  That  the  term  for  which  the  loan  is  desired  is  16  years. 

3.  That  the  purposes  of  the  loan  and  the  uses  to  which  it  will  be 
applied  are: 


?«,««. 

EaUmsta] 

^ 

BUtw. 

'S'K'^.ar' '"  '"-Mb. ..« ....„.™,» 

s,z 

3,<S7,600 

11,733,760 

Ud  1,000  40401  n»l  box  on  ud  rcr  cvrUIn  ipKlkl  *ppU- 

8,183,»3 

*.839,H1 

gss 

tl.l00 

3,«(l,9e7 
M,  380,600 

11,7S8,I» 

«.»4,460 

IS,  Ml,  141 

a),W.30» 

818  INTERSTATE  COMUBBCB  COMUISSIOK  BEFOBTS. 

4.  Its  present  and  prospective  ability  to  repay  the  loan  and  to 
meet  its  obligations  in  regard  thereto. 

6.  That  the  securit;  offered  is,  (a)  as  to  the  loan  for  new  locomo- 
tives, second  lien  under  an  equipment-trust  agreement;  {b)  as  to 
the  loan  for  reconstructed  equipment,  applicant's  refimding  and 
improvement  mortgage  bonds;  (o)  as  to  the  loan  for  betterments  to 
existing  equipment,  the  equipment  itself  or  the  applicant's  interest 
therein  as  represented  by  the  government's  loan ;  {d)  as  to  the  loan 
for  additions  to  roadway  and  structures,  applicant's  refunding 
and  improvement  mortgage  bonds;  and  (e)  as  to  the  loan  for  ma- 
turities, matured  bonds  as  extended,  or  the  applicant's  note  collat- 
erally secured  by  the  said  matured  bonds  as  extended. 

6.  That  the  extent  to  which  the  public  convenience  and  necessity 
will  be  served  by  the  loan  is,  that  it  will  enable  the  applicant  to 
provide  itself  with  additional  equipment  and  other  additions  and 
betterments  which  will  expedite  the  movement  of  trains,  and  also,  in 
that  the  loan  will  assist  the  applicant  in  meeting  its  maturities  and 
thereby  restoring  its  credit. 

The  application  was  accompanied  by  such  facts  in  detail  as  the 
Commission  required  with  respect  to  the  physical  situation,  owner- 
ship, capitalization,  indebtedness,  contract  obligations,  operation,  and 
earning  power  of  the  applicant,  together  with  such  other  facts  relat- 
ing to  the  propriety  and  expediency  of  granting  the  loan  applied 
for  and  the  ability  of  the  applicant  to  make  good  the  obligation,  as 
the  Commission  deemed  pertinent  to  the  inquiry. 

The  Association  of  Railway  Executives  recommended  the  follow- 
ing loans  to  the  applicant : 

(o)  Pot  freight  and  awltchlng  locomottTH $l,242.n00 

(6)  For  frelKht-traln  cats.. 


(c)  For  addltloDB  and  bettertnents  to  existing  equipment 16S,  532 

id)  For  additions  and  betterments  t^  way  and  structures  to  pro- 
mote tlie  movement  of  cars:  tbls  recommendation  la  for  addi- 
tional yards,  yard  tracks,  shop  machlneiy,  tools,  erteuslon  of 
erecting  shops,  second  track,  stock  pens,  and  other  mtscellana- 
OUB  Items;  It  also  inclndes  two  items  which  are  properly 
classified  as  addttlons  and  bettennents  to  equipment,  Danely, 
safety  appliances  for  cars,  $22,600,  and  electric  headlights  for 

locomotives,  $59,500 1, 496, 897 

<«>  For  matarlng  obligations 5,879.121 

Total 9.087,054 

The  Commission  on  August  26,  1920,  certified  its  approval  of  a' 
loan  of  $8,000,000  to  the  applicant  to  aid  it  in  meeUng  its  1920 

maturities. 

66LO.a 


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LOAN  TO  BBIB  R.  B.  819 

The  i^ipUctnt,  by  letter  of  ite  rice  president  and  general  counsel, 
dated  S^tomber  23, 1920,  requested  that  consideratioQ  of  tJtiat  part 
of  its  application  in  respect  of  the  loan  to  aid  it  in  the  purchase  Of 
86  new  heavy  mikado-type  locomotiTee  be  deferred. 

The  applicant  has  proposed  to  finance  about  70  per  cent  of  the 
estimated  oost  of  additions  and  betterments  to  be  made.  The  cer- 
tificate will  provide  th^  the  loan,  together  with  the  entire  amount 
to  be  financed  by  the  applicant,  shall  have  been  expended  or  defi- 
nitely obligated  for  said  purposes,  or  the  entire  loan  shall  be  repaid 
to  the  United  States,  on  or  before  January  1, 1922. 

After  informal  hearings  and  investigation,  we  find  that  the  mak- 
ing in  part  of  Uie  proposed  loan  by  the  United  States  to  aid  the 
applicant  in  making  additions  and  betterments : 


p,w-. 

nr* 

FInuioed 

sS 

8,261,  «S 
I,m,9(» 

4,839,ea 

SEL^tSS-  S5°i-:£"SS.  w"°*  "^"rSofet'S 

and  uisliu  tlKb  uid  npiSi  tnckt  M  nrloui  aAata:  tlactrle 
tnek  rlTtr  Udb;  ittop  mKhiury  ud  toob,  U4on  bMnttj  cniui, 

8,«»,SS3 

t.m,ta 

r  in  order  to  enable  the  applicant  properly  to  meet  the 
transportation  needs  of  the  public;  that  the  prospective  earning 
power  of  the  applicant,  and  character  and  value  of  the  security 
offered,  afford  reasonable  assurance  of  the  applicant's  ability  to 
r^ay  the  loan  within  the  time  fixed  therefor,  and  to  meet  its 
other  obligations  in  connection  with  such  loan,  and  reasonable 
protection  to  the  United  States;  and  that  the  applicant  is  unable 
to  provide  itself  from  other  sources  with  funds  necessary  for  the 
aforesaid  purposes. 
An  appropriate  certificate  will  be  issued. 


Certificate  A'o.  S7  for  a  Loan  under  Section  tlO  of  the  Transportation 
Act,  19S0,  at  Amended. 

The  Interstate  Commerce  Commission  certifies  to  the  Secretary 
of  the  Treasury  its  findings: 
""■"■<"  «,==, Google 


820  INTERSTATE   COMMERCE   COMMISSION   BEPORTS. 

1.  That  the  making  of  &  loan  of  $1,840,700  by  the  United  States 
to  the  Krie  Bailroad  Company,  hereinafter  referred  to  as  the  appli- 
cant, for  the  purpose  of  aiding  the  applicant  in  making  additions 
and  betterments  to  existing  equipment  and  to  way  and  structures,  is 
necessary  to  enable  the  applicant  properly  to  meet  the  transportation 
needs  of  the  public. 

2.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  fumiah 
reasonable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor  and  to  meet  its  other  obligations  in 
connection  with  such  loan. 

3.  That  the  amount  of  the  loan  which  is  to  be  made  is  $1,840,700. 

4.  That  the  time  from  the  making  thereof  within  which  the  loan 
is  to  be  repaid  is  15  years. 

That  the  terms  and  conditions  of  the  loan,  including  the  security  to 
be  given  for  repayment,  are: 

(a)  The  loan  shall  be  collaterally  secured  by  the  pledge  of 
$2,946,000,  principal  amount,  of  applicant's  refunding  and  improve- 
ment mortgage  6  per  cent  gold  bonds,  issued  under  an  indenture  of 
mortgage,  dated  December  1,  1916,  executed  by  the  applicant  to  the 
Bankers  Trust  Company,  of  New  York,  trustee,  as  amended  by  sup- 
plement thereto,  dated  April  1, 1918.  These  bonds  are  in  temporary 
form,  without  coupons,  exchangeable  for  engraved  bonds,  in  denomi- 
nations of  $1,000,  $500,  or  multiples  thereof,  and  are  of  the  series, 
numbers,  denominations,  and  principal  amounts  as  hereinbelow  set 
forth: 

Mamben.  nenomlniUoDa.  Aatonnla. 

Series  A,  T-38 *500,000         600,000 

Series  A,  T-40  and  41 250,000  600,000 

Series  A,  T-2 100.000  100,000 

Series  A,  T-66. 48.000  46,000 

Series  B,  T-46.  46,  and  47 600.000      1,600,000 

Series  B,  T-68.  64,  and  65 100.000         800,000 

Total 2,946.000 

(J)  The  applicant  may  repay  all  or  any  part  of  the  loan  before 
maturity.  The  collateral  security  shall  be  released  proportionately 
as  parts  of  the  loan  are  repaid. 

(c)  The  applicant  shall,  on  demand  of  the  Secretary  of  the 
Treasury,  with  the  concurrence  of  the  Interstate.  Commerce  Com- 
mission, deposit  with  the  Secretary  of  the  Treasury  such  additional 
security  as  may  be  from  time  to  time  required;  the  securities 
pledged,  together  with  any  t^at  may  be  pledged  hereafter,  or  may 
have  been  pledged  heretofore,  as  security  for  this  loan,  or  any 
other  obligation  of  the  applicant  to  the  United  States,  for  loana 
under  section  210  of  the  transportation  act,  19S0,  as  amended,  shall 

«i.c.a 


LOAN  TO  BBIS  B.  B.  821 

be  spplicable  in  like  manner  to  secure  the  repayment  of  any  and  all 
such  loans. 

(d)  The  applicant  has  agreed  in  an  instrument  in  writing,  dated 
the  15th  day  of  October,  1920,  filed  with  the  Interstate  Commerce 
Commission,  to  the  following  conditions:.  (1)  That  the  amount  to 
be  iioaoced  by  it  in  connection  with  the  loan  shall  be  so  financed 
t^t  the  cost  to  it  of  any  loans  secured  from  sources  other  than 
the  United  States  government  shall  not  exceed  7j  per  cent  per 
annum,  including  in  such  cost  discounts,  attorneys'  fees,  and  any 
and  all  other  expenses  in  connection  therewith;  (2)  the  expendi- 
tures made  from  the  loan  shall  be  confined  to  such  expenditures  as 
may  be  chargeable  to  accounts  for  inTestment  in  road  and  equip- 
ment provided  in  the  Commission's  accounting  classification  for 
steam  roads  in  effect  at  the  time  the  expenditures  may  be  made ;  and 
(3)  the  applicant  shall  furnish  the  Commission  on  or  about  July 
1,  1921,  and  January  1,  1922,  the  detailed  certificate  under  oath  of 
its  chief  engineer,  showing  the  character  and  costs  of  the  additions 
and  betterments  made  with  or  in  connection  with  this  loan  for 
said  purposes.  The  entire  loan,  together  with  substantially  the 
entire  amount  to  be  financed  by  the  applicant  shall  have  been  ex- 
pended or  definitely  obligated  for  said  purposes,  or  the  entire  loan 
shall  be  repaid  to  the  United  States,  on  or  before  January  1,  1922. 
In  the  event  the  Commissioii  shall  certify  to  the  Secretary  of  the 
Treasury  that  the  applicant  has  failed  or  refused  well  and  truly 
to  comply  with  any  one  or  more  of  the  terras  and  conditions  con- 
tained in  said  agreement,  the  whole  or  any  part  of  the  obligations 
evidencing  the  loan,  as  the  Commission  may  designate,  shall,  at 
the  option  of  the  holder,  become  due  and  payable. 

6.  That  the  proG^ective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnishes,  in 
the  opinion  of  the  Commission,  reasonable  assurance  of  the  appli- 
cant's ability  to  repay  the  loan  within  the  time  fixed  therefor,  and 
reasonable  protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  itself  with  the  funds  necessary  for  the  aforesaid  pur< 
poses  from  other  sources. 

Done  in  Washington,  D.  C,  this  22d  day  of  October,  1920. 

06844*— 22— Vol  85 O. 


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INTERSTATE   GOMMEBOB  OOUMtSSUON   BEPORTS. 


Finance  Dockbt  No.  1008. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  PENN- 
SYLVANIA RAILROAD  COMPANY  FOR  A  LOAN  FROM 
THE  UNITED  STATES  TO  AID  IN  PROVIDING  NEW 
EQUIPMENT  AND  OTHER  ADDITIONS  AND  BETTER- 
MENTS.  

BubnMted  October  16,  IBiO.    D«Mei  Ootober  it,  1920. 


Application  graoted  In  part  and  loan  of  96,760,000  approved. 

H.  Tatnall  for  applicant. 

Report  of  the  Couhibsion. 
Division  4,  CoHMiesioNERs  Metbr,  Daniels,  Eastman,  and  Pdtteb. 
Br  Division  4: 

The  Pennsylvania  Railroad  Company,  a  carrier  by  railroad  sub- 
ject to  the  interstate  commerce  act,  hereinafter  referred  to  as  the 
applicant,  on  May  28, 1920,  made  application  to  the  Interstate  Com- 
merce Commission  for  a  loan  from  the  United  States  in  accordance 
with  section  210  of  the  transportation  act,  1920. 

In  said  application  the  applicant  sets  forth : 

1.  That  the  amount  of  the  loan  desired  is  $18,000,000. 

2.  That  the  term  for  which  the  loan  is  desired  is  16  years. 

3.  That  the  purposes  of  the  loan  and  the  uses  to  which  it  will  h« 
applied  are  the  purchase  of  equipment,  costing  $11,000,000,  and 
additions  and  betterments  to  way  and  structures,  costing  $7,000,000: 

4.  Its  present  and  prospective  ability  to  repay  the  loan  and  to 
meet  its  obligations  in  regard  thereto. 

5.  That  the  security  offered  is  stooks  and  bonds  selected  from 
those  owned  by  the  applicant,  and  oar-trust  securities  which  may 
be  secured  upon  equipment  purchased  with  the  proceeds  of  the  loan. 

6.  That  the  extent  to  which  the  public  convenience  and  necessity 
will  be  served  is  that  the  loan  will  result  in  increasing  the  facilities 
required  in  the  operation  of  the  applicant's  lines  and  in  completing 
additions  and  betterments  to  way  and  structures  already  authorized 
and  actively  progressing  under  the  United  States  Railroad  Admin- 
istration at  the  termination  of  federal  Control. 

The  application  was  accompanied  by  such  facts  in  detail  as  the 
Commission  required  with  respect  to  the  physical  situation,  owner- 
ship, capitalization,  indebtedness,  contract  obligations,  operation, 
and  earning  power  of  the  applicant,  together  with  such  other  facta 
relating  to  the  propriety  and  expediency  of  granting  the  loan  applied 

66 1.0.  a 

Digitized  by  Cotlt^lc 


LOAN   TO  PBNNS1XVA27U  B.  B.  3SS 

for  and  the  ability  of  the  applicant  to  make  good  Uie  obligation,  at 
the  Commisfiion  deemed  pertinent  to  the  inquiry. 

The  Association  of  Railway  Executives  recommended  the  making 
of  a  loan  to  the  applicant  of  $6,780,126  for  additions  uid  better- 
ments to  way  and  structures. 

The  applicant,  by  letter  of  it«  rice  president  in  charge  of  finance, 
dated  October  15,  1920,  requested  immediate  consideration  of  only 
that  part  of  its  application  in  respect  of  additions  and  betterments. 

After  investigation,  the  Commission  finds  that  the  making  in  part 
of  the  proposed  loan  by  the  United  States  for  additions  and  bet- 
terments to  way  and  structures,  to  promote  the  movement  of  freight 
traffic  as  hereinafter  set  forth: 


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824  IITTBRSTATE  COMMEBCE  COMMISSION  BEPOETS. 

or  in  even  tens  of  thousands  of  doUara,  $6,780,000  is  necessary  to 
enable  the  applicant  properly  to  meet  the  transportation  needs  of  the 
public;  that  the  prospective  earning  power  of  the  applicant  and  char- 
acter and  value  of  the  security  offered,  afford  reasonable  assurance 
of  the  applicant's  ability  to  repay  the  loan  within  the  time  fixed 
therefor  and  to  meet  its  other  obligations  in  connection  with  such 
loan,  and  reasonable  protection  to  the  United  States;  and  that  the 
applicant  is  unable  to  provide  itself  with  funds  necessary  for  the 
aforesaid  purposes  from  other  sources. 
An  appropriate  certificate  will  be  issued. 


Certificate  No.  38  for  a  Loan  wnder  Section  210  of  the  Transporta- 
tion Act,  1920,  OB  Amended. 

The  Interstate  Commerce  Commission  certifies  to  the  Secretary 
of  the  Treasury  its  findings: 

1.  'That  the  making  of  a  loan  of  $6,780,000  by  the  United  States  to 
the  Pennsylvania  Railroad  Company,  hereinafter  referred  to  as  the 
applicant,  for  the  purpose  of  enabling  applicant  to  make  additions 
and  betterments  to  way  and  structures  to  promote  the  movement  of 
freight  traSic,  is  necessary  to  enable  the  applicant  properly  to  meet 
the  transportation  needs  of  the  public. 

2.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  of  the  security  offered  are  such  as  to  furnish  reasonable 
assurance  of  the  applicant's  ability  to  repay  the  loan  within  the  time 
fixed  therefor  and  to  meet  its  other  obligations  in  connection  with 
such  loan. 

3.  That  the  amount  of  the  loan  which  is  to  be  made  is  $6,780,000. 

4.  That  the  time  from  the  making  thereof,  within  which  the  loan 
is  to  be  repaid  in  full  is  10  years. 

5.  That  the  terms  and  conditions  of  the  loan,  including  the  security 
to  be  given  for  repayment,  are: 

{a)  The  loan  shall  be  collaterally  secured  by  the  pledge  of 
108,500  shares  of  the  capita]  stock  of  the  Pittsburgh,  Cincinnati, 
Chicago  &  St.  Louis  Railroad  Company  of  the  par  value  of 
$10,050,000. 

(J)  The  applicant  may  repay  all  or  any  part  of  the  loan  before 
maturity.  ITie  collateral  security  shall  be  released  proportionately 
as  parts  of  the  loan  are  repaid. 

(c)  The  applicant  shall,  on  demand  of  the  Secretary  of  the  Treas- 
ury, with  the  concurrence  of  the  Interstate  Commerce  Commission, 
deposit  with  the  Secretary  of  the  Treasury  such  additional  security 
as  may  be  from  time  to  time  required ;  the  securities  pledged,  together 
with  any  that  may  be  pledged  hereafter,  or  may  have  been  pledged 

65 1.  C.  O. 


LOAir  TO  VBxiiasrLVAxru.  b.  b.  825 

heretofore,  as  security  for  this  loan  or  any  other  obligation  of  the 
said  applicant  to  the  United  States  for  loans  under  section  210  of 
the  transportaticm  act,  1920,  as  amended,  shall  be  applicable  in  like 
manner  to  secure  the  repayment  of  any  or  all  such  loans. 

(d)  The  applicant  has  agreed  in  an  instrument  in  writing,  dated 
the  15th  day  of  October,  1920,  filed  with  the  Interstate  Commerce 
Commission,  to  the  following  conditions :  ( 1 )  The  expenditures  made 
from  the  loan  shall  be  ccmfined  to  such  expenditures  as  may  be 
chargeable  to  accounts  for  investment  in  road  and  equipment  pro- 
vided in  the  Commission's  accounting  classification  for  steam  roads  in 
effect  at  the  time  the  expenditures  may  be  made;  and  (2)  the  appli- 
cant shall  furnish  the  Commission  on  or  about  Jul;  1,  1921,  and 
January  1,  1922,  the  detailed  certificate  under  oath  of  its  chief  engi- 
neer showing  the  character  and  costs  of  the  additions  and  better- 
ments made  with  or  in  connection  with  the  loan.  The  loan  shall  have 
been  expended  or  definitely  obligated  for  the  purposes  for  which 
loaned,  or  repaid  to  the  United  Stales,  on  or  before  Janjiary  1,  1922. 
In  event  the  Commission  shall  certify  to  the  Secretary  of  the  Treas- 
ury that  the  applicant  has  failed  or  refused  well  and  truly  to  comply 
with  any  one  or  more  of  the  terms  and  conditions  contained  in  said 
agreement,  the  whole  or  any  part  of  the  obligations  evidencing  the 
loan,  as  the  Commission  may  designate,  shall,  at  the  option  of  the 
holder,  become  due  and  payable. 

6,  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish,  in  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor,  and  reason- 
able protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  itself  with  the  funds  necessary  for  the  aforesaid  purposes 
from  other  sources. 

Done  in  Washington,  D.  C,  this  22d  day  of  October,  1920. 
651.0.  a 


D,=;,lz.J.,C00gIC 


INIBBSTATB  OOUU&BCB   OOUIUBSION   BEFOKTS. 


F1KANC2  Docket  No.  44. 
IK  THE  MATTER  OF  THE  APPLICATION  OF  THE  CHI- 
CAUO,  INDIANAPOLIS  A  LOUISVILLE  BAILWAY  COM- 
PANY  FOR  AUTHORITY  TO  ISSUE  NOTES  AND  TO  AS- 
SUME PAYMENT  OF  OTHER  NOTES. 

Bubmittei  September  24,  l9eo.    Decided  October  23,  1929. 

Authority  granted  to  Issue  as  of  July  21,  1920,  three  promissory  notes  aggn- 
gating  $87,000,  and  to  assume  payment  of  nine  promissory  notes  aggre- 
gating 918,000. 

C.  C.  Sine  for  applicant. 

Report  of  the  Cohhission. 
Division  4,  Commissionerb  Meteb,  Danieu,  Eastican,  ahd  Poxtxr. 
Bt  Division  4: 

The  Chicago,  Indianapolis  &  Louisville  Railway  Company,  a 
common  carrier  by  railroad  engaged  in  interstate  commerce,  seeks 
authority  under  section  20a  of  the  interstate  commerce  act  to  issue 
as  of  July  21,  1920,  three  6  per  cent  promissory  notee  a^regating 
$87,000,  maturing  December  1,  1920,  June  1,  1921,  and  December  1, 
1921,  respectively,  and  to  assume  payment  of  nine  5^  per  cent 
promissory  notes  aggregating  $18,000,  maturing  serially  up  to  and 
including  December  15, 1928.  Applicant  became  obligated  on  April 
SO,  1920,  to  make  the  payments  represented  by  the  above-mentioned 
notes,  having  on  that  date  entered  into  a  contract  with  the  Cincin* 
nati,  Indianapolis  &  Western  Railroad  Company  to  purchase  cer- 
tain real  estate  and  freight-yard  facilities  located  in  Indianapolis, 
Ind.,  known  as  bulking  yards.  The  total  amount  expended  for  the 
purchase  of  the  property  was  $167,474.33.  These  notes  represent 
part  of  the  purchase  price.  In  pursuance  of  its  agreement  of  April 
30,  1920,  the  applicant  appears  to  have  issued  the  three  notes  and 
assumed  payment  of  the  nine  notes  on  July  21,'  1920,  inadvertently, 
and  without  intent  to  violate  section  20a. 

The  three  not«s  for  the  issue  of  which  authority  is  asked,  and  the 
nine  notes  for  the  assumption  of  payment  of  which  authority  is  also 
asked,  together  with  all  other  outstanding  notes  of  a  maturity  of  two 
years  or  less,  aggregate  more  than  5  per  cent  of  the  par  value  of  the 
securities  of  the  applicant  outstanding  on  the  date  of  this  appli- 
cation. 

The  application  was  made  under  oath,  signed,  and  filed  on  behalf 
of  the  applicant  by  one  of  its  executive  officers  duly  designated  for 

«n.  c.  a 


KOTVS  OF  OHIO&OO,  UmUSArOUB  A  LOUISTILLB  BY.         827 

that  purpose.  Notice  of  the  filing  of  die  application  has  been  given 
to,  and  a  cop;  thereof  filed  with,  the  governor  of  each  of  the  states 
in  which  the  applicant  operates.  No  objection  to  the  granting  of 
the  applioation  has  been  offered  b;  anj  ^^ite  authority. 

Upon  eonsideratioa  of  the  record,  we  find  that  the  issue  of  said 
three  promissory  notes,  in  the  aggregate  amount  of  $87,000,  and  the 
assumption  of  said  nine  promiBsory  notes  in  the  aggregate  amount  of 
$18,000,  by:  the  applicant  (a)  are  for  a  lawful  object  within  the  cor- 
porate purposes,  of  the  Chicago,  Indianapolis  &  Louisville  Railway 
Company,  and  compatible  with  the  public  interest,  which  is  necessary 
and  appropriate  for  and  consistent  with  the  proper  performance  by 
it  of  service  to  the  public  as  a  common  carrier,  and  which  will  not 
impair  Ha  ability  to  perform  that  service;  and  {&)  are  reasonably 
necessMy  and  appropriate  for  such  purpose. 

An  appropriate  order  will  be  entered. 

ORDER. 

Investigation  of  the  matters  and  things  involved  in  this  applica- 
tion having  been  had,  and  the  said  Division  having,  on  the  date 
hereof,  made  and  filed  a  report  containing  its  findings  of  fact  and 
conclusions  thereon,  which  report  is  hereby  referred  to  and  made  a 
part  hereof: 

It  is  ordered^  That  the  Chicago,  Indianapolis  &.  Louisville  Railwky 
CcHnpany  be,  and  it  is  hereby,  authorized  (1)  to  issue,  as  of  the  date 
of  July  21,  1920,  three  promissory  notes  of  the  aggregate  principal 
amount  of  $87,000,  each  of  said  notes  to  be  dated  July  21,  1920,  to 
bear  interest  at  the  rate  of  6  per  cent  per  annum,  and  to  be  secured 
by  a  purchase-money  mortgage  to  be  dated  July  21,  1920,  from  the 
applicant  to  the  Cincinnati,  Indianapolis  &  Western  Bailroad  Com- 
pany, the  first  of  said  notes  to  be  in  the  sum  of  $35,000  and  the 
principal  thereof  to  be  payable  on  or  before  December  1,  1920,  the 
second  of  said  notes  to  be  in  the  sum  of  $35,000  and  the  principal 
thereof  to  be  payable  on  or  before  June  1, 1921,  and  the  third  of  said 
notes  to  be  in  the  sum  of  $17,000  and  the  principal  thereof  to  be 
payable  December  1,  1921 ;  each  of  the  notes  to  be  substantially  in 
the  forms  submitted  with  the  application ;  these  notes,  or  the  proceeds 
thereof,  to  be  used  solely  for  the  purpose  of  making  payment  in  part 
of  the  purchase  price  of  certain  real  estate  and  freight-yard  facilities 
in  Indianapolis,  Ind.,  known  as  bulking  yard;  and  (2)  to  assume, 
as  of  the  date  of  July  21, 1920,  the  payment  of  nine  promissory  notes, 
each  in  the  sum  of  $2,000,  dated  December  16,  1898,  bearing  interest 
at  the  rate  of  5^  per  cent  per  annum,  payable  semiannually,  which 
semiannual  interest  is  evidenced  by  18  other  promissory  notes  as  pro- 
vided for  in  the  mortgage  dated  December  15, 1898,  from  the  Cincin- 


828  INTERSTATE  COlfMEBOE  OOUMISBIOIT  BEPOBIB. 

nati,  Hamilton  &  Dayton  Railway  Company  to  the  Fire  AsBociation 
of  Philadelphia ;  the  said  nine  notes,  each  for  $2,000,  maturing  suo- 
cessively  on  the  ISth  day  of  December  in  the  years  1920  to  1928,  in- 
clusive; said  nine  notes  imd  the  18  notes  evidencing  interest  thereon 
beng  secured  by  the  aforesaid  mortgage;  said  assumption  of  payment 
of  these  nine  notes  to  be  in  satisfaction  in  part  of  the  purchase  price 
of  the  aforesaid  real  estate  and  freight-yard  facilities. 

It  M  further  ordered.  That  the  applicant  shall,  on  or  before  Decem- 
ber 31,  1920,  and  every  six  months  thereafter,  report  to  ti»  Ccnnmia- 
sioo  all  pertinent  facts  relating  to  the  issue  of  notes  and  assumption 
of  payment  of  notes  as  herein  authorized,  the  use  of  the  same,  or  of 
the  proceeds  thereof,  and  the  payment  of  said  notes;  each  of  said 
reports  to  be  signed  by  an  executive  officer  of  the  applicant  having 
knowledge  of  the  facts  and  verified  by  his  oath,  and  to  be  made 
periodically  as  herein  required  until  all  of  the  notes  shall  have  been 
paid  or  otherwise  satisfied. 

And  it  ia  further  ordered,  That  nothing  herein  shall  be  construed 
to  imply  any  guaranty  or  obligation  as  to  said  notes,  or  the  interest 
thereon,  on  t^e  part  of  the  United  States. 

eSLGC 


Digilzed  by  Google 


BOimS  OP  ATOHISOV,  TOraKA  A  SABTA  FE. 


FiNANOB  Docket  No.  64. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  ATCHI 
SON,  TOPEKA  A  SANTA  FE  RAILWAY  COMPANY  FOR 
AUTHORITY  TO  ISSUE  CALIFORNIA-ARIZONA  LINES 
FIRST  AND  REFUNDING  MORTGAGE  BONDS. 

ButnUttea  Octohcr  IS.  19S0.    DeotOeit  October  iS.  1920. 

AutliOTlt;  granted  for  Issue  to  an  extent  not  esceeding  $15,486  of  CalifornlK 
Arizona  Unea  first  and  refunding  mortgage  bonds,  being  $26.70  on  eadt 
ll/no  bond  given  In  excbange  for  eacb  <200  bond,  ot  equivalent,  aurrea- 
dered  and  canceled,  under  a  ceitoln  siortgAge^ 

S.  T.  Bledsoe  for  applicant  and  intervener. 

Report  of  the  Commission. 
Division  4,  Commisoonebs  Meter,  Daniels,  Eastman,  and  Pott^. 
Bt  Division  4 : 

This  proceeding  was  instituted  by  the  filing  of  an  application  bj 
the  Atchison,  Topeka  &  Santa  Fe  Railway  Company,  a  common  car- 
rier by  railroad  engaged  in  interstate  commerce,  which  seeks  author- 
ity under  section  20a  of  the  interstate  commerce  act  to  issue  $15,486 
of  California-Arizona  lines  first  and  refunding  mortgage  bonds, 
payable  in  United  States  gold  coin. 

The  California,  Arizona  &  Santa  Fe  Railway  Company,  herein 
tenned  the  intervener,  which  owns  certain  lines  of  railroad  in  the 
states  of  California  and  Arizona,  all  of  which  are  leased  to  the 
applicant,  has  filed  an  intervening  petition  in  this  proceeding,  be- 
cause the  bonds  proposed  to  be  issued  will  be  secured  upon  the  prop- 
erty of  the  intervener. 

The  applicant  and  the  intervener  united  in  an  agreement,  dated 
March  1, 1912,  a  oopy  of  which  is  filed-  with  the  application,  to  the 
Guaranty  Trust  Company  of  New  York,  whereby  certain  properties 
of  the  intervener  were  conveyed  in  trust  to  secure  an  issue  of  not  ex- 
ceeding $50,000,000  of  bonds  described  as  Califorma-Arizona  lines 
first  and  refunding. mortgage  bondfc  By  a  separate  agreement  the 
intervener  agreed  that  it  would  be,  as  between  itself  and  the  appli- 
cant, the  principal  obligor  for  the  payment  of  the  principal  and  in- 
terest of  said  bonds.  The  bonds  are  to  be  issued,  however,  in  the 
name  of  the  applicant  as  the  promisor. 

It  was  provided  in  the  mortgage  that  bonds  might  be  made  pay- 
able in  dollars,  sterling,  or  fraocs.    Of  bonds  payable  in  sterling  for 

65l.aO. 


380  DTTEBSTATE  GOICMBRCB  001CHIS8I0N  BEP0KF8. 

the  face  amount  of  $564^14,  there  are  now  outstanding  $549^14.60, 
with  $14,599.50  thereof  in  the  treasury  of  the  applicant.  Under  the 
terms  of  the  mortgage  these  bonds  are  exchangeable  for  bonds  pay- 
able in  dollars.  When  necessary  to  ascertain  the  equivalent  in  dol- 
lars of  the  amount  of  the  bonds  payable  in  sterling,  such  equivalent 
is  to  be  computed  at  the  rate  of  $4.8665  to  the  pound  sterling. 

The  exchange  of  a  £200  bond,  or  equivalent  amount  in  pounds 
sterling,  for  a  $1,000  bond  therefore  results  in  an  increase  of  $26.70 
in  the  face  amount  of  bonds  issued  under  the  mortgage.  The  appli- 
cation is  for  authority  to  cover  this  increase. 

The  application  was  made  under  oath,  signed,  and  filed  on  behalf 
of  the  applicant  by  an  executive  officer  duly  designated  for  that 
purpose.  Notice  of  the  filing  of  the  application  has  been  given  to, 
and  a  copy  thereof  filed  with,  the  governor  of  each  of  the  states  in 
which  the  applicant  operates.  No  objection  to  the  granting  of  the 
application  has  been  offered  by  any  state  authority. 

Upon  consideration  of  the  record,  we  find  that  the  proposed  issue 
to  the  extent  not  exceeding  $16,486  of  said  bonds,  being  $26.70  on 
each  $1,000  bond  given  in  exchange  for  each  £300  bond,  or  equivalent 
amount  in  pounds  sterling,  surrendered  and  canceled,  (a)  is  for 
a  lawful  object  within  the  corporate  purposes  of  the  Atchison, 
Topeka  &  Santa  Fe  Railway  Company,  and  compatible  with  the 
public  interest,  which  is  necessary  and  appropriate  for  and  con- 
sistent with  the  proper  performance  by  it  of  service  t»  the  public 
as  a  common  carrier,  and  which  will  not  impair  its  ability  to  per- 
form that  service;  and  (b)  is  reasonably  necessary  and  appropriate 
for  such  purpose. 

An  appropriate  order  will  be  entered. 

ORDER. 

Investigation  of  the  matters  and  things  involved  in  this  proceed- 
ing having  been  had,  and  the  said  Division  having,  on  the  date  here- 
of, made  and  filed  a  report  containing  its  findings  of  fact  and  con- 
clusions thereon,  which  report  is  hereby  referred  to  and  made  a 
part  hereof: 

li  is  ordered,  That  the  Atchison,  Topeka  &  Santa  Fe  Railway 
Company  be,  and  it  is  hereby,  autborised  to  issue  not  exceeding 
$15,486  of  California-Arizona  lines  first  and  refunding  mortgage 
bonds,  being  $26.70  on  each  $1,000  bond  given  in  exchange  for  toach 
£200  bond,  or  equivalent  amount  in  pounds  sterling,  surrendered 
and  canceled;  the  issue  to  be  for  the  sole  purpose  of  effecting  the 
exchange  of  $564,514  of  applicant's  California-Arizona  first  and 
refunding  mortgage  bonds  payable  in  steriing,  for  bonds  payable 
in  dollars,  in  accordance  with  the  mortage  dated  March  1,  1912, 

65 1,  o.  c. 


BOHDS  OF  AIOHISOir,  TOFBIU  *  SAITTA  FB  BT.  381 

made  by  the  applicant  and  intervener  to  the  Guaranty  Trust  Com- 
pany of  New  York. 

It  is  further  ordered,  That  the  dollar  bonds  issued  upon  the  sur- 
render and  cancellation  of  the  $14^99.50  of  sterling  bonds  now  in 
the  treasury  of  the  applicant,  shall  nmain  in  the  applicant's  treas- 
ury and  shall  not  be  sold,  pledged,  repledged,  or  otherwise  dis- 
posed of  except  as  may  be  authorized  by  the  future  order  of  this 
Commission. 

It  is  further  ordered,  That  the  applicant  shall,  on  or  before 
December  81,  1920,  and  each  six  months  thereafter  until  all  of  such 
bonds  heroby  authorized  have  beesi  issued  in  accordance  with  this 
order,  report  to  this  Commission  the  amount  of  bonds  so  issued, 
each  report  to  be  signed  by  an  executive  officer  of  said  company 
having  knowledge  of  the  facts  and  verified  by  his  oath. 

And  it  is  further  ordered.  That  nothing  herein  shall  be  construed 
to  imply  any  guaranty  or  other  obligation  as  to  said  bonds,  or  the 
interest  thereon,  on  the  part  of  the  United  Stetes, 

65I.C.C. 


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INTEBSTATB  COISMXBCB  COMUISSIOIT  BEPOKTS. 


Finance  Docket  No.  960. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  DELA- 
WARE &  HUDSON  COMPANY  FOB  A  LOAN  FROM  THE 
UNITED  STATES  TO  AID  IN  PROVIDING  EQUIPMENT 
AND  OTHER  ADDITIONS  AND  BETTEEMENTa 


BubmUted  Ootober  2S,  19S0.    Decided  October  SB.  IBSO. 


Application  granted  in  part  and  loan  of  ¥1,12&,000  approred. 
W.  B.  WUliame  for  applicant, 

SUPPUBMBNTAL  RePORT  OF  THE  CoUUISSION. 

DiviaiON  4,  CoMMiesiONEsa  Meter,  Danihia,  Eavtuan,  and  Potter. 
By  Division  4 : 

The  Delaware  &  Hudson  Company,  a  carrier  by  railroad  subject 
to  the  interstate  commerce  act,  hereinafter  referred  to  as  the  appli- 
cant, on  June  19,  192U,  made  application  to  the  Interstate  Commerce 
Commission  for  a  loan  from  the  United  States  in  accordance  with 
section  210  of  the  transportation  act,  1920,  as  amended,  and  OQ  Octo- 
ber 1, 1920,  the  applicant  amended  the  application. 

In  the  application,  as  amended,  the  applicant  sets  forth: 

1.  That  the  amount  of  the  loan  desired  is  $3,475,000. 

2.  That  the  term  for  which  the  loan  is  desired  is  to  expire  June 
1,  1930. 

3.  That  the  purposes  of  the  loan  and  the  uses  to  which  it  will  be 
applied  are  to  provide  itself  with  passenger-train  equipment  and 
additions  and  betterments  to  way  and  structures  as  follows:  Pas- 
senger-train cars,  estimated  cost,  $1,125,000;  additions  and  better- 
ments to  way  and  structures,  estimated  cost,  $2,250,000;  making  total 
of  $3,475,000. 

4.  The  present  and  prospective  ability  of  the  applicant  to  repay 
the  loan  and  to  meet  its  obligations  in  that  regard. 

5.  That  the  security  offered  is  $3,475,000,  principal  amount,  of 
applicant's  first  and  refunding  mortgage  4  per  cent  gold  bonds,  due 
1943,  and  stock  of  the  following  corporations  owned  by  the  applicant : 


suck. 

Shuti. 

Ptr 

TtllU 

'ar 

^' 

»'.m 

s 

>,ao.ooo 

4,0»,000 

LOAir  TO  DBL&WABB  *  HUDSON  00. 


888 


6.  That  the  extent  to  which  the  public  convenience  ^ndnMcsnt^ 
will  be  served  by  the  loan  is  that  a  saving  of  approximately  1,000 
cars  and  2  locomotives  would  be  had,  and  in  addition  thereto,  3avings 
in  operation  costs  would  result  and  the  efficiency  and  capacity  of  the 
railway  would  be  correspondingly  increased. 

The  application  was  accompanied  by  such  facts  in  detail  ae  the 
Commission  required  with  respect  to  the  physical  situation,  owner- 
ship, capitalization,  indebtedness,  contract  obHgations,  operation, 
and  earning  power  of  the  applicant,  togetlier  with  such  other  facte 
relating  to  the  propriety  and  expediency  of  granting  the  loan 
applied  for  and  the  ability  of  the  applicant  to  make  good  the 
obligation,  as  the  Commission  deemed  pertinent  to  the  inquiry. 

The  Association  of  Railway  Executives  recommended  &  loan  of 
$2^60,000  to  the  applicant  for  additions  and  betterments  to  promote 
the  movement  of  cars. 

After  investigatioDB,  the  Commission  finds  that  a  loui  to  the 
applicant  by  the  United  States  of  $l,125j000  for  additions  and 
betterments,  apportioned  as  follows: 


"Sr- 

s^ 

fiMn 

Fllml     II        IWhltehUt         1 

i.aw.ooo 
500,000 

3,260,000 

1,  IK,  000 

'      ' 

is  necessary  in  order  to  enable  the  applicant  properly  to  meet  the 
transportation  needs  of  the  public;  that  the  prospective  earning 
power  of  the  applicant,  and  character  and  value  of  the.  security' 
offered,  afford  reasonable  assurance  of.  the  applicant's  ability  to 
repay  the  loan  within  the  time  fixed  therefor,  and  to  meet  its  other 
obligations  in  connection  with  such  loan,  and  reasonable  protection 
to  the  United  States;  and  that  the  applicant  is  unable  to  provide 
itself  from  other  sources  with  funds  necessary  for  the  aforesaid 
purposes. 

Further  consideration  will  be  given,  upon  separate  application, 
to  a  loan  to  the  applicant  for  the  acquisiticMi  of  15  milk  cars  on 
condition  that  the  applicant  undertake  to  finance  75  per  cent  of  the 
total  cost  thereof. 

An  appropriate  amended  certificate  will  be  isBued  and  certificate 
No.  16  of  August  9, 1930,  «ill  be  canceled. 

esLac 


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884  IKTEBSTATB  OOMMBROB  OOUlflSSIOM  BBFOBTB. 

Amended  Certificate  No.  16  for  a  Loan  wider  StcUon  StO  of  the 
Tranaportation  Act,  19S0. 

The  Interstate  Commerce  Commission  certifies  to  the  Secretary  of 
the  Treasury  it«  findings : 

1.  That  the  making  of  a  loan  of  $1,125,000  by  the  United  States  to 
the  Delaware  db  Hudson  Company,  hereinafter  referred  to  as  the 
applicant,  for  the  purpose  of  aiding  it  in  making  additions  and 
betterments  to  way  and  structures  to  promote  the  movement  of 
freight-train  cars,  is  necessary  to  enable  the  applicant  properly  to 
meet  the  transportation  needs  of  the  public. 

3.  That  the  prospective  earning  power  of  the  applicant  and  the 
character  and  value  of  the  security  offered  are  such  as  to  furnish 
reasonable  assurance  of  the  applicant's  ability  to  repay  the  loan 
within  the  time  fixed  therefor,  and  to  meet  its  other  obligations  in 
connection  with  such  loan. 

3.  That  the  amount  of  the  loan  which  is  to  be  made  is  $1,125,000. 

4.  That  the  loan  shall  be  repaid  in  full  on  or  before  June  1,  1980. 

5.  That  the  terms  and  conditions  of  the  loan,  including  the  security 
to  be  given  for  repayment,  ore: 

(a)  The  loan  shall  be  collaterally  secured  by  the  pledge  of 
$1,700,000, 'principal  amount,  of  applicant's  first  and  refunding  mort- 
gage 4  per  cent  gold  bonds,  due  1943,  issued  under  an  indenture  of 
mortgage  dated  May  1,  1908,  executed  by  the  applicant  to  the 
Farmers'  Loan  &  Trust  Company,  New  York,  trustee.  Said  bonds 
are  in  denomination  of  $1,000  and  ore  numbered  42^17  to  44,01G, 
inclusive. 

(h)  The  applicant  may  repay  all  or  any  part  of  the  loan  before 
.maturity.  The  collateral  security  shall  be  released  proportionately 
as  parts  of  the  loan  are  repaid. 

(o)  That  the  applicant  shall,  on  demand  of  the  Secretary  of  the 
Treasury,  with  the  concurrence  of  the  Interstate  Commerce  Commis- 
sion, deposit  with  the  Secretary  of  the  Treasury  such  additional 
security  as  may  be  from  time  to  time  required ;  the  securities  pledged, 
together  with  any  that  may  be  pledged  hereafter,  or  may  have 
been  pledged  heretofore  as  security  for  this  loan  or  any  other  obli- 
gation of  the  said  applicant  to  the  United  States  for  loans  made 
under  section  210  of  the  transportation  act,  1920,  as  amended,  shall 
be  applicable  in  like  manner  to  secure  the  repayment  of  any  and 
all  such  loans. 

(d)  The  applicant  has  agreed  in  an  instrument  in  writing,  dated 
the  21st  day  of  October,  1920,  filed  with  the  Interstate  Commerce 
Commission,  to  the  following  conditions:  (1)  That  the  amount  to  be 
financed  by  it  in  connection  with  the  loan  shall  be  so  financed  that 
the  cost  to  it  of  any  loans  secured  from  sources  other  than  the 

65LaG 


LOAK  TO  DELAWABE  A  HtTDSON  00.  886 

United  States  government  shall  not  exceed  7  per  cent  per  annum, 
including  in  such  cost  discounts,  attorneys'  fees,  and  any  and  all 
other  expenses  in  connecttion  therewith;  (2)  the  expenditures  mode 
from  the  loan  for  additions  and  betterments  shall  be  confined  to  such 
expenditures  as  may  be  chargeable  to  accounts  for  investment  in 
road  and  equipment  provided  in  the  Commission's  accounting  classi- 
fication for  steam  roads  in  effect  at  the  time  the  expenditures  may  be 
made;  and  (3)  the  applicant  shall  furnish  the  Commission  on  or 
about  July  1,  1921,  and  January  1,  1922,  the  detailed  certificates 
under  oath  of  its  chief  engineer,  showing  the  character  and  costs  of 
the  additions  and  betterments  made  with  or  in  connection  with  this 
loan  for  said  purposes.  The  loan  for  additions  and  betterments  shall 
have  been  expended  or  definitely  obligated  for  the  purposes  for 
which  loaned,  or  shall  be  repaid  to  the  United  States,  on  or  before 
January  1,  1922. 

6.  That  the  prospective  earning  power  of  the  applicant,  together 
with  the  character  and  value  of  the  security  offered,  furnish,  in  the 
opinion  of  the  Commission,  reasonable  assurance  of  the  applicant's 
ability  to  repay  the  loan  within  the  time  fixed  therefor,  and  reason- 
able protection  to  the  United  States. 

7.  That  the  applicant,  in  the  opinion  of  the  Commission,  is  unable 
to  provide  Itself  with  the  funds  necessary  for  the  aforesaid  pur- 
poses from  other  sources. 

Certificate  No.  16,  of  August  10, 1920,  is  hereby  canceled. 
Done  in  Washington,  D.  C,  this  26tb  day  of  October,  192a 
6SI.aG. 


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IMTEBSTATB  GOMUEBOB  OOICMISSION  BBFOBTS. 


FlNANCB  UOCKBT  No.  1004. 

IN  THE  MATTER  OF  THE  APPLICATION  OF  THE  NORTH- 
ERN PACIFIC  RAILWAY  COMPANY  FOR  A  LOAN  FROM 
THE  UNITED  STATES  TO  AID  IN  PROVIDING  EQUIP- 
MENT AND  OTHER  ADDITIONS  AND  BETTERMENTS. 


SubmUtei  October  tS.  1920.    Deddea  October  n,  1910. 


Application  graated  and  a  loan  of  $6,000,000  awoTwl. 
Howard  EUiott  for  applicant. 

RepOKT  of  the  COHHISSION. 

Division  4,  Couuissionbrs  Meteb,  Daniels,  Eastman,  and  Ptvrnn. 
By  Division  4 : 

The  Northern  Pacific  Railway  Cconpany,  a  carrier  by  railroad 
subject  to  the  interstate  commerce  act,  hereinafter  referred  to  as  the 
applicant,  on  May  15,  1920,  made  application  to  the  Interstate  Com- 
merce Commission  for  a  loan  from  the  United  States,  in  acoordance 
with  eectitm  210  of  the  transportation  act,  1920,  as  amended,  to  pro- 
vide itself  with  equipment  and  additions  and  betterments,  and  oa 
June  17, 1920,  the  applicant  amended  ^e  application. 

In  the  application,  as  amended,  the  applicant  sets  forth: 

1.  That  the  amount  of  the  loan  desired  is  $6,000,000. 

2.  That  the  term  for  which  the  loan  is  desired  is  15  years. 

3.  That  the  purposes  of  the  loan  and  the  uses  to  which  it  will  be 
applied  are  to  aid  the  applicant  in  providing  itself  with  new  equip- 
ment and  in  making  additions  and  betterments  to  existing  equipment 
and  to  way  and  structures  as  follows : 


PurpoM. 

"S'^ 

E^S 

S 

'•g 

2,  MO 

i 

am 

z 

"wisssri.duu 

g,MD,x» 

■■ii 
is 

l«,fl».«« 

ntam 

LOAir  TO  HORTHBBN  PACIFIC  EY. 


ParpoM. 

EHinwUd 

^f"* 

K? 

War  ud  (tTiietaiM-CaDtliiiud. 

11 

11 

301,000 

PUadrivin.ctuiM.iivndaR.uidwark-tmncui 

B,3M,MS 

tSMXOOS 

12  400  000 

10,OW,1M 

4.  Its  present  and  prospective  ability  to  repay  the  loan  and  to  meet 
its  obligations  in  regard  thereto. 
6.  That  the  security  available  Is: 

Apidlcant'B  general-Iiea  S  per  cait  bosda ^,398,  COO 

Nortbeni  Paclfic-Oretit  Northern    (C,  B.  &  Q.  collateral)  Joint  4 

per  c«t  bonds 1,271,000 

It  liberty  loon  bonds 6, 538, 000 

: 13, 207, 600 

6.  That  the  extent  to  which  the  public  convenience  and  necessity 
will  be  served  is  that  the  equipment  and  additions  and  betterments 
to  be  acquired  from  the  proceeds  of  the  loan  will  result  in  a  more 
expeditious  handling  of  traffic,  thereby  avoiding  delays  and  conges- 
tion due  to  inadequate  facilities. 

Said  application  was  accompanied  by  such  facts  in  detail  as  the 
Commission  required  with  respect  to  the  physical  situation,  owner- 
ship, capitalization,  indebtedness,  contract  obligations,  operation,  and 
earning  power  of  the  applicant,  together  with  such  facts  relating  to 
the  propriety  and  expediency  of  granting  the  loan  applied  for,  and 
the  ability  of  the  applicant  to  make  good  the  obligation,  as  the  Com- 
mission deemed  pertinent  to  the  inquiry. 

The  Association  of  Railway  Executives  recommended  a  loan  to  the 
applicant  as  follows : 


For  freight  and  switching  locomotives— 
For  freight-train  cara 


$1,853,978 

1. 746, 022 

2,400.000 

6,000,000 

After  investigation,  we  find  that  the  making  of  the  whole  of  the 
proposed  loan  by  the  United  States  for  the  purposes  aforesaid  is 
necessary  to  enable  the  applicant  properly  to  meet  the  transporta- 
tion needs  of  the  public  j  that  the  prospective  eaming  power  of  the 
M844'— 28— Vol « 28 


D,=;,lz...,C00gIC 


838  INTEBSTA.TE  COMMERCE   COMMISSION  BBFOBTS. 

applicant,  together  with  the  character  and  value  of  the  security  of- 
fered, afford  reasonable  assurance  of  the  applicant's  ability  to 
repay  the  loan  within  the  time  fixed  therefor  and  to  meet  its  other 
obligations  in  connection  with  such  loan,  and  reaBonable  protection  to 
the  United  States;  and  that  the  applicant  is  unable  to  provide  itself 
with  funds  necessary  for  the  aforesaid  purposes  from  other  sources. 
An  appropriate  certificate  will  be  issued. 


Certificate  No.  39  for  a  Loan  under  Section  SIO  of  the  Transporta- 
tion Act,  19B0,  ai  Amended. 

The  Interstate  Commerce  Commission  certifies  to  the  Secretary  of 
the  Treasury  its  findings : 

1.  That  the  making  of  a  loan  of  $6,000,000  by  the  United  States  to 
the  Northern  Pacific  Railway  Company,  hereinafter  referred  to  as 
the  applicant,  for  the  purpose  of  aiding  the  applican